ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Black shirt
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Blue shirt
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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. A farmer chooses to plant wheat; the opportunity cost is planting a different crop, or an alternate use of the resources (land and farm equipment).
Detailed explanation-2: -The United States has the comparative advantage in making shirts. In the United States, the opportunity cost of making one shirt is giving up 1/3 boot, but Canada’s opportunity cost of making 1 shirt is 1 boot.
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.
Detailed explanation-4: -economic cost. The out-of-pocket cost of an action, plus the opportunity cost. economic profit. A firm’s revenue minus its total costs (including the opportunity cost of capital).