ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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$5
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$100
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what could have been bought with the $5
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what could have been bought with the $100
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Detailed explanation-1: -Opportunity Cost Example Deciding whether to spend a gift card on a strawberry smoothie or a banana smoothie. Deciding whether to spend $7 every morning on coffee or consistently invest that money in a retirement account. Deciding whether to invest capital in refurbishing equipment or in better employee training.
Detailed explanation-2: -The alternative name of opportunity cost is Economic cost.
Detailed explanation-3: -Opportunity cost is equal to implicit costs plus explicit costs.
Detailed explanation-4: -For example, choosing public transportation to travel to a particular destination by foregoing the option of traveling in one’s own car is a good example of opportunity cost, because you end up saving money which needs to be spent on fuel.