ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Opportunity cost is calculated by applying the following formula: Opportunity Cost = Return on Most Profitable Investment Choice-Return on Investment Chosen to Pursue.

Detailed explanation-2: -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-3: -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-4: -Instead of working one night, you go to a concert that costs $25 and lasts two hours. The opportunity cost of the concert is $150 for two hours of work. David decides to quit working and got to school to get further training. The opportunity cost of this decision is the lost wages for a year.