ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Gurnee has 2 acres of unused land. They choose to build another chicken restaurant. Which option would NOT be considered a logical Opportunity Cost of that choice? Using the land for farming.

Detailed explanation-2: -Opportunity Cost Example Deciding whether to spend a gift card on a strawberry smoothie or a banana smoothie. Deciding whether to spend $7 every morning on coffee or consistently invest that money in a retirement account. Deciding whether to invest capital in refurbishing equipment or in better employee training.

Detailed explanation-3: -The opportunity cost of a choice is the value of the best alternative given up. Scarcity is the condition of not being able to have all of the goods and services one wants. It exists because human wants for goods and services exceed the quantity of goods and services that can be produced using all available resources.

Detailed explanation-4: -A student spends three hours and $20 at the movies the night before an exam. The opportunity cost is time spent studying and that money to spend on something else. A farmer chooses to plant wheat; the opportunity cost is planting a different crop, or an alternate use of the resources (land and farm equipment).

Detailed explanation-5: -You cannot do everything you want to, so you are forced to choose between different alternatives. If you choose to spend the day at the beach, you give up going to class or working. This concept of scarcity leads to the idea of opportunity cost.