ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The iPhone
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Beach Vacation
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A new Samsung Galaxy
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A remodeled house
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Detailed explanation-1: -Opportunity cost, explained The value of the vacation you could have taken with the same amount of money would be the opportunity cost if you decide to buy the laptop. Similarly, if you decide to take the vacation, the opportunity cost would be the laptop you could have purchased with the same amount of money.
Detailed explanation-2: -The correct answer is b. Benefits foregone by not choosing an alternative course of action.
Detailed explanation-3: -Even though the opportunity cost of 2 apples is always one orange, the more apples are made, the more costly producing apples is in terms of welfare/utility.
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.