ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Opportunity Cost
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Trade off
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scarcity
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Economics
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Detailed explanation-1: -“Opportunity cost is the value of the next-best alternative when a decision is made; it’s what is given up, ” explains Andrea Caceres-Santamaria, senior economic education specialist at the St. Louis Fed, in a recent Page One Economics: Money and Missed Opportunities.
Detailed explanation-2: -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-3: -The statement is TRUE. The significance of the better opportunity foregone in a specific choice is referred to as opportunity cost. It’s not just the money spent on that option. Limited availability, preference, and opportunity cost are central concepts in economic analysis.
Detailed explanation-4: -Opportunity cost is the value of the next best alternative forgone as a result of making a decision. Opportunity cost is a function of scarcity.