Match List-I with List-II and select the correct answer: List-I List-II a. Real cost 1. Aggregate of accounting costs and implicit costs b. Money cost 2. Physical quantities of factors used in production c. Opportunity Cost 3. Monetary expenditure on inputs d. Economic cost 4. Sacrifice of alternative use of given resources

The correct answer is: A. a-4, b-1, c-3, d-2

• Real cost is the sacrifice of alternative use of given resources.
• Money cost is the monetary expenditure on inputs.
• Opportunity cost is the value of the best alternative forgone when a choice is made.
• Economic cost is the aggregate of accounting costs and implicit costs.

Accounting costs are the explicit costs of production, such as the wages paid to workers and the cost of materials. Implicit costs are the opportunity costs of using resources that are owned by the firm, such as the opportunity cost of the time of the firm’s owner.

Economic cost is the sum of accounting costs and implicit costs. It is the total sacrifice made by the firm in order to produce a good or service.