ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Formula of Opportunity cost = Return of Investment from the best option available – Return of investment from the chosen option.

Detailed explanation-2: -Opportunity cost is the value of sacrificing the best alternative available to the choice made. The opportunity cost of an additional unit of goods is the marginal opportunity cost.

Detailed explanation-3: -The opportunity cost of moving from point C to D is 40 tons of oranges. The per-unit opportunity cost of moving from point C to point D is 1/2 ton of oranges (40 tons of oranges/80 tons of pears). Economic growth is shown by a shift to the right of the production possibilities curve.

Detailed explanation-4: -The amount spent by a firm on resources bought in the market is an opportunity cost of production because the firm could have bought different resources to produce some other good or service. If the firm owns capital and uses it to produce its output, then the firm incurs an opportunity cost.