ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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jeans
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shirt
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Either A or B
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None of the above
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Detailed explanation-1: -The opportunity cost of producing a pair of pants in the USA is 5 bushels of wheat, while in China, it is 2 bushels of wheat. As a result: there can be mutual gains from trade to the two countries if the USA exports wheat to China in exchange for pants.
Detailed explanation-2: -Opportunity cost is calculated by applying the following formula: Opportunity Cost = Return on Most Profitable Investment Choice-Return on Investment Chosen to Pursue.
Detailed explanation-3: -Answer and Explanation: The cost of buying a $20, 000 car is the next best alternative of using that money. This could be investing the $20, 000 or using it to buy a horse instead. The opportunity cost of something is what you gave up to get it.
Detailed explanation-4: -What is the opportunity cost of buying a $20, 000 car? The benefit from spending that $20, 000 on the next-best alternative. What is the opportunity cost of buying a $22, 000 car? The benefit from spending that $22, 000 on the next-best alternative.