Suppose a person quits a job earning $40,000 per year and starts a business with $175,000 withdrawn from a money-market account earning 12% per year.
The implicit cost of the business is $___________ the entrepreneur's time plus $___________ for the entrepreneurs funds
Implicit cost is the value of the benefit or income forgone to take up another activity. In this example for the business it's the wages and interest income forgone by the person to start the business.
