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 the amusement park
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$100
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Either A or B
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None of the above
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Detailed explanation-1: -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-2: -Principle #2: The cost of something is what you give up to get it. example: College education. The benefits are the job opportunities and personal satisfaction, but there are costs besides “out of pocket” costs like tuition and books.
Detailed explanation-3: -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.
Detailed explanation-4: -Opportunity Cost Example Deciding whether to spend a gift card on a strawberry smoothie or a banana smoothie. Deciding whether to spend $7 every morning on coffee or consistently invest that money in a retirement account. Deciding whether to invest capital in refurbishing equipment or in better employee training.