For each of the costs listed below, identify whether it is an explicit or implicit cost to a firm. Which costs would be subtracted from a firm’s total revenue to calculate economic profit, and which to calculate accounting profit?

a. hourly wages to the firm’s employees

b. depreciation of the firm’s physical assets

c. the risk-free 2 percent return the firm’s owners could receive on their financial capital instead of investing it in the firm

d. annual rental payments for a production facility

e. the additional wages the owner/manager could have received in alternative employment

f. the risk premium of 3 percent that the owners of the firm could earn on their financial capital if they invested it in an equally risky venture