ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Opportunity Cost = Return on Most Profitable Investment Choice-Return on Investment Chosen to Pursue. Opportunity Cost = $80, 000 (selling ten cars worth $8, 000 each)-$60, 000 (selling 5 trucks worth $12, 000 each) Opportunity Cost = $20, 000.

Detailed explanation-2: -Because of scarcity, every time we do one thing we necessarily have to forgo doing something else desirable. So there is an opportunity cost to everything we do, and that cost is expressed in terms of the most valuable alternative that is sacrificed….

Detailed explanation-3: -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.

Detailed explanation-4: -In microeconomic theory, the opportunity cost of a choice is the value of the best alternative forgone where, given limited resources, a choice needs to be made between several mutually exclusive alternatives.