ECONOMICS
MONEY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Opportunity Cost
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Variable Expenses
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Fixed Expenses
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Pay Yourself First
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Detailed explanation-1: -Opportunity cost is commonly defined as the next best alternative. Also, known as the alternative cost, it is the loss of gain which could have been gained if another alternative was chosen. It can also be explained as the loss of benefit due to a change in choice.
Detailed explanation-2: -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-3: -What Is Opportunity Cost? Opportunity costs represent the potential benefits that an individual, investor, or business misses out on when choosing one alternative over another. Because opportunity costs are unseen by definition, they can be easily overlooked.
Detailed explanation-4: -Why is opportunity cost important? Opportunity cost is a framework that helps us understand choices and can be used to help select the best choice in how to use a scarce resource (time, money, etc.).