ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The enjoyment you received from going to the movie.
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$8 that you no longer have available.
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The $8 you could have spent on something else.
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The satisfaction you would have received from eating the meal.
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Detailed explanation-1: -The opportunity cost of going a movie is the net benefit associated with the next best alternative forsaken by choosing to go for the movie. In the given scenario, the opportunity cost of going to movie is the net benefit which could be gained by investing the same time and money somewhere else.
Detailed explanation-2: -The opportunity cost of a choice is the next best alternative given up. For example, assume a person is choosing between pancakes and waffles for breakfast. If they choose pancakes, the enjoyment of eating waffles is the opportunity cost. It was the next best alternative (2nd choice) that was not selected.
Detailed explanation-3: -Opportunity cost is a term in economics used to describe benefits that are lost when choosing one option over another. In short, it’s a value of the road not taken. Opportunity costs are easy to overlook, but understanding missed opportunities is crucial to better decision making in business.
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).