ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Opportunity cost refers to what you have to give up to buy what you want in terms of other goods or services. When economists use the word “cost, ” we usually mean opportunity cost.

Detailed explanation-2: -Opportunity cost does not show up directly on a company’s financial statements. Economically speaking, though, opportunity costs are still very real. Yet because opportunity cost is a relatively abstract concept, many companies, executives, and investors fail to account for it in their everyday decision making.

Detailed explanation-3: -Opportunity cost is defined as the cost of the next best alternative foregone. It represents the sacrifices that people must make due to the scarcity of resources.

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.