ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A change in opportunity costs would probably change a persons behavior. Wealthy people like bill gates and steve jobs don’t have to deal with scarcity. Most goods are rationed by brute force. People compete for whatever their society uses as a rationing device.

Detailed explanation-2: -For instance, when the opportunity costs change in the market, people tend to re-evaluate the different choices they made. The re-evaluation of choices may force individuals to change their behaviors and tailor decisions to capitalize on opportunity costs changes.

Detailed explanation-3: -Opportunity cost refers to what you have to give up to buy what you want in terms of other goods or services. When economists use the word “cost, ” we usually mean opportunity cost. The word “cost” is commonly used in daily speech or in the news.

Detailed explanation-4: -Opportunity cost is the value or benefit of an alternative choice compared to the value of what is chosen. The concept of opportunity cost is used in decision-making to help individuals and organizations make better choices, primarily by considering the alternatives.

Detailed explanation-5: -A student spends three hours and $20 at the movies the night before an exam. 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).