ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A deposit of shale oil is discovered in an area of farming. The following estimates are made for a ten-year period. ● If the land is used only for farming it would yield income after tax of $10 billion. ● If the land is used only for shale oil extraction it would yield income after tax of $40 billion. ● The government would receive $5 billion in taxes from farming and $10 billion in taxes from shale oil extraction. What is the opportunity cost of using the land only for farming?
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$25 billion
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$30 billion
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$35 billion
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$45 billion
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Explanation:
Detailed explanation-1: -Because of resource scarcity, economic agents must make choices. Making choices not only applies to consumers but also businesses and governments.
Detailed explanation-2: -A market system is the network of buyers, sellers and other actors that come together to trade in a given product or service. The participants in a market system include: Direct market players such as producers, buyers, and consumers who drive economic activity in the market.
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