BUSINESS ADMINISTRATION
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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I should buy a book rather than a food
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If I buy a computer, I must do without a 35” television
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If I spend a lot now means I will spend more in the future
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If I study today, I must give up going to the football game
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Detailed explanation-1: -The correct answer is Sunlight. Sunlight does NOT have an opportunity cost.
Detailed explanation-2: -When economists refer to the “opportunity cost” of a resource, they mean the value of the next-highest-valued alternative use of that resource. If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you can’t spend the money on something else.
Detailed explanation-3: -The opportunity cost is time spent studying and that money to spend on something else. A farmer chooses to plant wheat; the opportunity cost is planting a different crop, or an alternate use of the resources (land and farm equipment). A commuter takes the train to work instead of driving.
Detailed explanation-4: -Costs relating to sacrificed alternatives.