ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Both the magazine and the soda
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The magazine
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The soda
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The candy
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Detailed explanation-1: -Opportunity cost is defined as the cost of the next best alternative foregone. It represents the sacrifices that people must make due to the scarcity of resources.
Detailed explanation-2: -The opportunity cost of a good is the alternative goods forgone. the price of alternative goods foregone.
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: -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. The evaluation of choices and opportunity costs is subjective; such evaluations differ across individuals and societies.