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Question

Calculate Anisha's economic cost.

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

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.2,800×1,000 ) +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

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