ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -Our unlimited wants are continually colliding with the limits of our resources, forcing us to pick some activities and to reject others. Scarcity is the condition of having to choose among alternatives. A scarce good is one for which the choice of one alternative use of the good requires that another be given up.
Detailed explanation-2: -Where there is scarcity, choices must be made! Scarcity refers to the finite nature and availability of resources while choice refers to people’s decisions about sharing and using those resources.
Detailed explanation-3: -Economics is sometimes called the study of scarcity because economic activity would not exist if scarcity did not force people to make choices. When there is scarcity and choice, there are costs. The cost of any choice is the option or options that a person gives up.
Detailed explanation-4: -Opportunity cost is the value of the benefits of the foregone alternative, of the next best alternative that could have been chosen, but was not.