ECONOMICS
SCARCITY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A poverty in an economy no longer existed
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B the supply of all resources were unlimited
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C resources were allocated efficiently
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D real wages were flexible
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E all current incomes were invested in technological research
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Detailed explanation-1: -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-2: -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-3: -Opportunity Cost Decision Making An opportunity cost is a hypothetical cost incurred by selecting one alternative over the next best available alternative. Opportunity costs are relevant in business decision making. In addition, companies commonly use them when evaluating corporate projects.
Detailed explanation-4: -Can the opportunity cost be zero? Yes. The formula for calculating opportunity cost is to compare the net benefit of one choice with the benefit of another option. If the difference between those benefits is zero, then the opportunity cost is zero, meaning you’d get the same benefit from either choice.