Implicit Cost

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Definition of 'Implicit Cost'

Implicit costs are the costs of an action or decision that are not directly paid for. They are often overlooked, but they can have a significant impact on the overall cost of a project or decision.

One example of an implicit cost is the opportunity cost of choosing one option over another. For example, if you decide to go to college, you are giving up the opportunity to work full-time and earn money. The opportunity cost of going to college is the amount of money you would have earned if you had worked instead.

Another example of an implicit cost is the cost of time. When you make a decision, you are spending time on it. The time you spend making the decision is an implicit cost.

Implicit costs are often difficult to measure, but they are important to consider when making decisions. By understanding the implicit costs of a decision, you can make more informed choices.

Here are some additional examples of implicit costs:

* The cost of commuting to work
* The cost of maintaining a car
* The cost of raising children
* The cost of healthcare
* The cost of retirement savings

Implicit costs are an important part of financial planning. By understanding the implicit costs of your decisions, you can make more informed choices and achieve your financial goals.

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