ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the time spent deciding to spend your money
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something else that could have been bought
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$35 in cash
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the time spent making the purchase and the tax paid on the bill
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Detailed explanation-1: -Answer and Explanation: The correct answer is b. Benefits foregone by not choosing an alternative course of action. Opportunity cost is the future income or cost that would have been earned or incurred if this alternative was chosen.
Detailed explanation-2: -Opportunity cost is a concept in Economics that is defined as those values or benefits that are lost by a business, business owners or organisations when they choose one option or an alternative option over another option, in the course of making business decisions.
Detailed explanation-3: -The opportunity cost of a choice is the value of the best alternative given up. Choices involve trading off the expected value of one opportunity against the expected value of its best alternative. The evaluation of choices and opportunity costs is subjective; such evaluations differ across individuals and societies.
Detailed explanation-4: -For example, choosing public transportation to travel to a particular destination by foregoing the option of traveling in one’s own car is a good example of opportunity cost, because you end up saving money which needs to be spent on fuel.