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The fixed cost on such factors of production which are neither hired nor brought by the firm is called
- a)Social cost
- b)Opportunity cost
- c)Economic cost
- d)Surcharged cost
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
The fixed cost on such factors of production which are neither hired n...
The correct option is A.
Social cost is defined as a sum of the private cost and external costs. The social cost is generally not borne by an individual. It may be borne by the entire society, city or even country. This is not a one-time cost like private cost. This cost is recurrent and it is very difficult to calculate due to the inclusion of external costs. The cost may result from an event, action, or policy changes. Social costs are not calculated whenever a seller sells any product or item to the buyer. This cost is added up from the use of that product.
Social cost is defined as a sum of the private cost and external costs. The social cost is generally not borne by an individual. It may be borne by the entire society, city or even country. This is not a one-time cost like private cost. This cost is recurrent and it is very difficult to calculate due to the inclusion of external costs. The cost may result from an event, action, or policy changes. Social costs are not calculated whenever a seller sells any product or item to the buyer. This cost is added up from the use of that product.
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The fixed cost on such factors of production which are neither hired n...
Introduction
The fixed cost refers to the expenses that a firm incurs regardless of its level of production or output. These costs do not vary with the quantity of goods or services produced. In this context, the fixed cost of factors of production that are not hired or purchased by the firm is referred to as social cost.
Social Cost
Social cost refers to the cost that is borne by society as a whole due to the production of goods or services. It includes both the private costs incurred by the firm and the external costs imposed on society. The fixed cost of factors of production that are not hired or purchased by the firm is considered a social cost because it is a cost that is borne by society and not by the firm itself.
Factors of Production
Factors of production are the resources that are used in the production process to create goods and services. They include land, labor, capital, and entrepreneurship. The fixed cost of factors of production that are neither hired nor purchased by the firm refers to resources that are not directly owned or controlled by the firm but are still necessary for production.
Examples of Social Cost
Here are some examples of factors of production that may be considered social costs:
- Public infrastructure: The use of public roads, bridges, and other infrastructure by a firm without directly paying for it can be considered a social cost.
- Natural resources: The use of natural resources, such as water or air, by a firm without paying for it can also be considered a social cost.
- Legal and regulatory framework: The benefits that a firm derives from the legal and regulatory framework provided by society without incurring any costs can be considered a social cost.
Conclusion
In summary, the fixed cost on factors of production that are neither hired nor purchased by the firm is considered a social cost. This is because these costs are borne by society as a whole and not by the firm itself. Examples of such costs include the use of public infrastructure, natural resources, and the legal and regulatory framework provided by society.
The fixed cost refers to the expenses that a firm incurs regardless of its level of production or output. These costs do not vary with the quantity of goods or services produced. In this context, the fixed cost of factors of production that are not hired or purchased by the firm is referred to as social cost.
Social Cost
Social cost refers to the cost that is borne by society as a whole due to the production of goods or services. It includes both the private costs incurred by the firm and the external costs imposed on society. The fixed cost of factors of production that are not hired or purchased by the firm is considered a social cost because it is a cost that is borne by society and not by the firm itself.
Factors of Production
Factors of production are the resources that are used in the production process to create goods and services. They include land, labor, capital, and entrepreneurship. The fixed cost of factors of production that are neither hired nor purchased by the firm refers to resources that are not directly owned or controlled by the firm but are still necessary for production.
Examples of Social Cost
Here are some examples of factors of production that may be considered social costs:
- Public infrastructure: The use of public roads, bridges, and other infrastructure by a firm without directly paying for it can be considered a social cost.
- Natural resources: The use of natural resources, such as water or air, by a firm without paying for it can also be considered a social cost.
- Legal and regulatory framework: The benefits that a firm derives from the legal and regulatory framework provided by society without incurring any costs can be considered a social cost.
Conclusion
In summary, the fixed cost on factors of production that are neither hired nor purchased by the firm is considered a social cost. This is because these costs are borne by society as a whole and not by the firm itself. Examples of such costs include the use of public infrastructure, natural resources, and the legal and regulatory framework provided by society.
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The fixed cost on such factors of production which are neither hired nor brought by the firm is called a)Social cost b)Opportunity cost c)Economic cost d)Surcharged costCorrect answer is option 'A'. Can you explain this answer?
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