BUSINESS ADMINISTRATION
BUSINESS ENVIRONMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The price of taking a chance
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The alternative you have to go without in a choice of two things
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The cost of opportunity
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The price you pay when you make a choice
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Detailed explanation-1: -The correct answer is the Value of the next best alternative that is given up. It is defined as the cost of the next best alternative foregone.
Detailed explanation-2: -Answer and Explanation: The correct answer is b. Benefits foregone by not choosing an alternative course of action. Opportunity cost is the future income or cost that would have been earned or incurred if this alternative was chosen.
Detailed explanation-3: -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-4: -If an input has no alternative use then the opportunity cost of that input is zero.