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| Question | Answer |
| Opportunity cost | Next best alternative foregone |
| Social cost | In a market failure/ externalities |
| Explicit cost | Costs which a firm a contracted to pay E.g wages /utility bills |
| Implicit cost | Cost which occurs when a firm owns some of the resources it is using. |
| Fixed cost | Cost which does not change as output change . |
| Variables cost | Cost which change as output changes E.g salaries of labour, petrol expenses,utilities,etc |
| Total cost | The cost of all the resources necessary to produce any particular level of output. It normally rises with output. |
| Marginal cost | Costs of producing one more or less unit of a commodity |
| Average cost | Is the total cost divided by the number of units of the commodity produced. |
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