ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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You stay out late and your parents ground you.
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You run a red light and you get a ticket.
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You choose to give up math to study for history.
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In a softball game, you miss the ball and strike out.
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Detailed explanation-1: -The correct answer is b. Benefits foregone by not choosing an alternative course of action.
Detailed explanation-2: -The opportunity cost of higher education is the sum of all the alternative activities a student could pursue instead of spending time in college attending classes and doing other activities.
Detailed explanation-3: -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. The word “cost” is commonly used in daily speech or in the news.
Detailed explanation-4: -Opportunity cost is calculated by applying the following formula: Opportunity Cost = Return on Most Profitable Investment Choice-Return on Investment Chosen to Pursue.