Which answer best defines opportunity cost?
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.
Opportunity cost is the forgone benefit that would have been derived from an option not chosen. To properly evaluate opportunity costs, the costs and benefits of every option available must be considered and weighed against the others.
Which statement best describes opportunity cost? Opportunity cost is the value in dollars of a trade-off.
Opportunity cost can best be defined as the. value of what must be given up in order to acquire an item. The term opportunity cost refers to the. value of what is forgone when a choice is made. You have just bought a used car, and drive away satisfied that you've made a good deal on the purchase.
The cost of making a choice is that the next best alternative is forgone. This is know as opportunity cost. For example if a Government decides to make the choice of devoting more resources to the NHS then the opportunity cost is devoting those resources into the education system.
Opportunity cost is commonly defined as the next best alternative. Also, known as the alternative cost, it is the loss of gain which could have been gained if another alternative was chosen. It can also be explained as the loss of benefit due to a change in choice.
What is the simple definition of opportunity cost? Opportunity cost is the value of what you lose when choosing between two or more options. Every choice has trade-offs, and opportunity cost is the potential benefits you'll miss out on by choosing one direction over another.
Opportunity cost is the profit lost when one alternative is selected over another. The concept is useful simply as a reminder to examine all reasonable alternatives before making a decision. For example, you have $1,000,000 and choose to invest it in a product line that will generate a return of 5%.
The Option c is correct
Opportunity cost best describes when the difference between the value of the next best alternative forgone and the alternative selected is calculated.
The correct answer is a. A computer company produces fewer laptops to meet tablet demand. Opportunity cost defines the benefit obtained by having a commodity after forgoing some other commodity. In the problem statement, the computer company incurs an opportunity cost of laptops for tablets.
Which scenario is the best example of an opportunity cost quizlet?
Terms in this set (10) Which scenario is the best example of an opportunity cost? A computer company produces fewer laptops to meet tablet demand.
b) The dollar value of tuition, books, room, and board, all associated explicit expenses, and the interest that could have been earned on that sum, but NOT the income that could have been earned over that time period.
The opportunity cost of a person attending college is the value of the best alternative use of that person's time, as well as the additional costs the person incurs by making the choice to attend college.
Opportunity cost is the most desirable alternative given up as the result of a decision. It is important because it creates opportunities and variation in the economy.
Which of these is most closely associated with opportunity cost? gross domestic product.
Opportunity Cost is when in making a decision the value of the best alternative is lost. e.g. choosing electricity over gas, the opportunity cost is what you've lost from not picking gas.
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Three Key Factors of Opportunity Cost
- Money. ...
- Time. ...
- Effort/Sweat equity.
The correct answer is Sunlight. Sunlight does NOT have an opportunity cost. Opportunity cost is the loss of benefit or value that would have been derived from an option that is not chosen. In other words, it is the profit lost when one alternative is selected over another.
Opportunity cost examples
A business owner wants to add a new product to the lineup. It requires an upfront investment of $1,000 to build and market. The opportunity cost is the potential value of that money being spent elsewhere or saved for the future.
The concept of Opportunity Cost helps us to choose the best possible option among all the available options. It helps us use every possible resource tactfully and efficiently and hence, maximize economic profits.
What is the opportunity cost of economic growth?
The opportunity cost of economic growth is current consumption forgone.
“Opportunity cost is the cost of making one decision over another. That can come in the form of time, money, effort, or 'utility'.”
The correct answer is b. Benefits foregone by not choosing an alternative course of action. Opportunity cost is the future income or cost that would have been earned or incurred if this alternative was chosen.
If it chooses to produce wheat, then the country's revenue from selling bananas is its opportunity cost for selling wheat. Thus, the company has two alternatives to choose from, which is an example of opportunity cost.
Marginal cost refers to the increase or decrease in the cost of producing one more unit or serving one more customer. It is also known as incremental cost.
In short, the opportunity cost of going to college is the cost of tuition, any associated costs, and any income, experience, and pleasure you miss out on because you choose to attend college.
The second component is opportunity cost, which represents the value of what someone must give up in order to attend college. For most people, the opportunity cost of a college education is equivalent to the wages that could have been earned by working instead of going to school.
On average, three-fourths of the private cost—the cost borne by the student and by the student's family—of a college education is the income that college students give up by not working. A good measure of this “opportunity cost” is the income that a newly minted high school graduate could earn by working full-time.
The equilibrium price is $4 and the equilibrium quantity is 1372. When the opportunity cost of an activity is high, then: It must have high marginal benefits to be the subject of an economic exchange.
Which of the following would NOT be part of the opportunity costs of going to college? Money spent on clothes. You would have had to buy clothes whether you attended college or not. All the other costs could have been avoided had you decided not to attend college.
What is the opportunity cost of current spending?
Opportunity Cost Definition
Opportunity cost is the value of what you lose when you choose from two or more alternatives. It's a core concept for both investing and life in general. When you invest, opportunity cost can be defined as the amount of money you might not earn by purchasing one asset instead of another.
The opportunity cost of any choice is the value of the best alternative that had to be forgone in making that choice.
opportunity cost. the most desirable alternative given up as the result of a decision. thinking at the margin. the process of deciding whether to do or use one additional unit of some resource. cost/benefit analysis.
How does opportunity cost affect decision making? When we make decisions about about how to spend our scarce resources, like money or time, we are giving up the chance to spend money or time on something else. All individuals, businesses, and large groups of people make decisions that involve trade-offs.
What you sacrifice / What you gain = opportunity costs.
Calculating Opportunity Cost - YouTube
Whenever a choice is made, something is given up. The opportunity cost of a choice is the value of the best alternative given up. Scarcity is the condition of not being able to have all of the goods and services one wants.
Opportunity cost is an economics term that refers to the value of what you have to give up in order to choose something else.
b) The dollar value of tuition, books, room, and board, all associated explicit expenses, and the interest that could have been earned on that sum, but NOT the income that could have been earned over that time period.
You can determine the opportunity cost of choosing one investment option over another by using the following formula: Opportunity Cost = Return on Most Profitable Investment Choice - Return on Investment Chosen to Pursue.
What is the principle of increasing opportunity costs?
The law of increasing opportunity cost is an economic principle that describes how opportunity costs increase as resources are applied. (In other words, each time resources are allocated, there is a cost of using them for one purpose over another.)
Someone gives up going to see a movie to study for a test in order to get a good grade. The opportunity cost is the cost of the movie and the enjoyment of seeing it. At the ice cream parlor, you have to choose between rocky road and strawberry.
Opportunity cost examples
A business owner wants to add a new product to the lineup. It requires an upfront investment of $1,000 to build and market. The opportunity cost is the potential value of that money being spent elsewhere or saved for the future.
Which statements demonstrate the meaning of opportunity cost for producers and consumers? - If producers can only produce one item, they must decide which item to produce based on profit. - Consumers are limited by their resources, and must give up the chance to purchase one item in order to buy another.
The opportunity cost of a person attending college is the value of the best alternative use of that person's time, as well as the additional costs the person incurs by making the choice to attend college.
In short, the opportunity cost of going to college is the cost of tuition, any associated costs, and any income, experience, and pleasure you miss out on because you choose to attend college.
The second component is opportunity cost, which represents the value of what someone must give up in order to attend college. For most people, the opportunity cost of a college education is equivalent to the wages that could have been earned by working instead of going to school.
The two types of opportunity costs are explicit opportunity cost and implicit opportunity cost. Explicit opportunity cost has a direct monetary value.
Calculating Opportunity Cost - YouTube
The concept of Opportunity Cost helps us to choose the best possible option among all the available options. It helps us use every possible resource tactfully and efficiently and hence, maximize economic profits.
What is the law of increasing opportunity cost quizlet?
The law of increasing opportunity costs states that: if society wants to produce more of a particular god, it must sacrifice larger and larger amounts of another good to do so.
the primary effect of increasing opp. costs is less than complete specialization.
Decreasing opportunity cost states that in producing more units of one commodity, one has to forego lesser and a lesser amounts of another commodity. This does not happen in practice.