ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Spending the day at a park
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Spending the day doing homework
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The money you spent on the ticket
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Hanging out with your friends at the basketball game
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Detailed explanation-1: -The correct answer is d) The money a student spends on rent for his apartment while attending school.
Detailed explanation-2: -What are some other examples of opportunity cost? A student spends three hours and $20 at the movies the night before an exam. The opportunity cost is time spent studying and that money to spend on something else.
Detailed explanation-3: -The money spent on food is not a part of the opportunity cost of going on holiday. Opportunity cost of production of a commodity refers to the cost which has to be sacrificed in terms of the next best alternative which could be produced out of that cost.
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.