ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Every decision you make comes with a price, which economists call the “opportunity cost.” Understanding it can help you become a better CFO of your life.

Detailed explanation-2: -The pleasure principle forces us to overlook our decisions’ opportunity costs. Every time you choose to do something in life, you are choosing not to do something else. This is known as opportunity cost-the possibilities you miss out on by making a certain decision.

Detailed explanation-3: -In business, opportunity costs play a major role in decision-making. If you decide to purchase a new piece of equipment, your opportunity cost is the money spent elsewhere. Companies must take both explicit and implicit costs into account when making rational business decisions.

Detailed explanation-4: -Answer and Explanation: Of the given statements about opportunity costs, (a) III only is TRUE. I. The opportunity cost of a given action is equal to the value foregone of all feasible alternative actions.

Detailed explanation-5: -Opportunity cost is the value or benefit of an alternative choice compared to the value of what is chosen. The concept of opportunity cost is used in decision-making to help individuals and organizations make better choices, primarily by considering the alternatives.