ECONOMICS
MONEY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Select the answer that best describes opportunity cost
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The amount of money you put into savings each year
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What you give up as a result of choosing one option versus another; a trade-off
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The amount of money a business makes every year from sales
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What you gain as a result of choosing one option versus another; a benefit
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Explanation:
Detailed explanation-1: -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-2: -In economics, opportunity cost represents the potential gain that is lost when choosing one investment choice over another. In short, it’s a value of the road not taken.
Detailed explanation-3: -trade-off-the giving up of one thing in return for something else. When you buy or do one thing with your money, you have to give up the chance to buy or do something else. This is a trade-off. opportunity cost-what you give up to get what you want.
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