Discussion
The cost incurred by the firm in hiring labour is called as
Answer: A
The cost the firm incurs in hiring labour is an explicit cost. Explicit costs are the actual payments the firm makes to outsiders for the factors and services it uses, such as wages, rent, interest and raw materials, and they appear in the firm's accounts. Implicit cost is the imputed value of the firm's own resources, such as the owner's time and capital, for which no payment is made. Marginal cost is the addition to total cost from one more unit of output, and total cost is the sum of all costs, so neither of them names the payment for hired labour.
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