Explicit and Implicit Costs A firms cost of production include explicit costs and implicit costs. . Explicit costs involve a direct money outlay for factors of production. iMplicit costs do not involve a direct money outlay H arc Inc items and derived items copyright o 2001 by Harcourt, IncHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Explicit and Implicit Costs A firm’s cost of production include explicit costs and implicit costs. uExplicit costs involve a direct money outlay for factors of production. uImplicit costs do not involve a direct money outlay