ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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When resources are limited, but wants are unlimited.
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Cost of one additional unit.
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The benefits that given up when you choose one thing over the next best alternative.
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The cost added by producing one additional unit of a product or service.
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Detailed explanation-1: -When economists refer to the “opportunity cost” of a resource, they mean the value of the next-highest-valued alternative use of that resource. If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you can’t spend the money on something else.
Detailed explanation-2: -“Opportunity cost is the value of the next-best alternative when a decision is made; it’s what is given up, ” explains Andrea Caceres-Santamaria, senior economic education specialist at the St.
Detailed explanation-3: -Opportunity cost is the difference in the benefit of a choice you are forgoing compared to the benefit of the choice you are making. You’ll recognize opportunity cost as an estimation of how much regret you’ll feel for making one choice over another.
Detailed explanation-4: -Opportunity cost is the value of what you lose when choosing between two or more options. Every choice has trade-offs, and opportunity cost is the potential benefits you’ll miss out on by choosing one direction over another.
Detailed explanation-5: -Opportunity cost is defined as the cost of the next best alternative foregone. It represents the sacrifices that people must make due to the scarcity of resources.