ECONOMICS
TECHNOLOGY
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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most expensive resource used in production
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value of the best alternative forgone when a choice is made
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monetary value of all alternatives forgone when a choice is made
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sum of all production costs
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Detailed explanation-1: -Opportunity cost is the value of the next best alternative forgone as a result of making a decision. Opportunity cost is a function of scarcity. Because of scarcity, people are faced with trade-offs in how they use their limited resources.
Detailed explanation-2: -Opportunity cost is the value of the best opportunity forgone in a particular choice. It is not simply the amount spent on that choice. The concepts of scarcity, choice, and opportunity cost are at the heart of economics. A good is scarce if the choice of one alternative requires that another be given up.
Detailed explanation-3: -Answer and Explanation: The highest-valued alternative that must be forgone when a choice is made is called opportunity cost.
Detailed explanation-4: -How is opportunity cost defined in everyday life? “Opportunity cost is the value of the next-best alternative when a decision is made; it’s what is given up, ” explains Andrea Caceres-Santamaria, senior economic education specialist at the St.
Detailed explanation-5: -When economists refer to the “opportunity cost” of a resource, they mean the value of the next-highest-valued alternative use of that resource. If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you can’t spend the money on something else.