ECONOMICS
OPPORTUNITY COST
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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vacation
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swimming pool
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Either A or B
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None of the above
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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: -What is the simple definition of opportunity cost? Opportunity cost is the value of what you lose when choosing between two or more options. Every choice has trade-offs, and opportunity cost is the potential benefits you’ll miss out on by choosing one direction over another.
Detailed explanation-4: -In economics, opportunity cost represents the potential gain that is lost when choosing one investment choice over another.