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: -The opportunity cost of a choice is the value of the best alternative given up. Choices involve trading off the expected value of one opportunity against the expected value of its best alternative.

Detailed explanation-3: -The alternative that you give up when you make an economic choice is called a trade-off. Usually, trade-offs do not require all-or-nothing choices.

Detailed explanation-4: -Opportunity costs represent the potential benefits that an individual, investor, or business misses out on when choosing one alternative over another. Because opportunity costs are unseen by definition, they can be easily overlooked.

Detailed explanation-5: -Implicit costs (also referred to as implied, imputed or notional costs) are the opportunity costs of utilising resources owned by the firm that could be used for other purposes.