Question

Calculate Anisha's economic cost.

• A. Rs. 3,30,000
• B. Rs. 40,000
• C. Rs. 28,00,000
• D. Rs. 31,30,000

Answer 1

The correct option is D Rs. 31,30,000

Economic costs include both explicit costs as well as implicit costs.
Economic cost $=28,00,000$ (accounting cost - $Rs.2,800\times 1,000$ ) $+2,90,000$ (salary that could have been earned by Anisha, implicit cost) $+40,000$ (10% interest that could have been earned on savings, implicit cost) $=Rs.31,30,000$