ECONOMICS (CBSE/UGC NET)

ECONOMICS

OPPORTUNITY COST

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
____ is the cost associated with giving up one thing for another.
A
opportunity cost
B
rationing
C
reallocation
D
alternative
Explanation: 

Detailed explanation-1: -Opportunity cost refers to what you have to give up to buy what you want in terms of other goods or services.

Detailed explanation-2: -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-3: -“Opportunity cost is the value of the next-best alternative when a decision is made; it’s what is given up, ” explains Andrea Caceres-Santamaria, senior economic education specialist at the St. Louis Fed, in a recent Page One Economics: Money and Missed Opportunities.

Detailed explanation-4: -Opportunity cost is what you give up (the benefits of the next best alternative) when you make a choice.

Detailed explanation-5: -Opportunity Cost-Key Takeaways There are two types of opportunity costs: explicit and implicit. Explicit Opportunity Costs are direct monetary costs that are lost when making a decision. Implicit Opportunity Costs do not consider the loss of direct monetary value when making a decision.

There is 1 question to complete.