The opportunity cost is the value of the next best alternative foregone. Every decision necessarily means giving up other options, which all have a value.
What is the term for giving up one choice for another opportunity quizlet?
trade-off . the act of giving up one benefit in order to gain another, greater benefit. guns or butter. a phrase expressing the idea that a country that decides to produce more military goods has fewer resources to produce consumer goods and vice versa. opportunity cost.
Which term defines all of the other options that are given up when a business makes one choice over another?
The opportunity cost is the value of the next best alternative foregone. Every decision necessarily means giving up other options, which all have a value.
What is an alternative that must be given up when one choice is made rather than another?
Trade-off – alternatives that must be given up when one is chosen rather than another. 17. Opportunity cost – cost of the next best alternative use of money, time, or resources when one choice is made rather than another.
Which term refers to the benefits of the best alternative option that are given up by a particular decision?
opportunity cost . the benefits of the best alternative option that are given up by a particular decision.
What is it called when an economic decision is made to give up the most attractive option?
trade-offs . The cost of an economic decision that is the most attractive option that is given up because one choice was made over another.
What is opportunity cost and why does it vary with circumstances?
What is opportunity cost and why does it vary with circumstances? Opportunity cost is the highest-valued alternative that must be given up to engage in an activity . It varies because it depends on your alternatives. Your opportunity cost is the value of the best alternative you gave up.
When you give up one thing and get another?
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.
What is giving up one thing for another?
Term. Tradeoff . Definition. the act of giving up one thing of value to gain another thing of value.
Why every decision has a trade off?
Every decision involves trade-offs because every choice you want results in picking it over something else . Opportunity cost means choosing the better one of two ideas. There will always be an alternative; what could have happened instead.
What is the struggle among sellers to attract consumers?
Competition : the struggle among sellers to attract consumers with the best products at the lowest prices.
What is an expense that does not change no matter how much a business produces?
FIXED COSTS – expenses that do not change no matter how much a business produces. Examples: rent, insurance.
What are the 3 Nations that have mixed economy?
Countries that have a mixed economy include the United States, the United Kingdom, Sweden, Iceland, France, and Germany .
What is the most desirable alternative given up?
The most desirable alternative given up as a result of a decision is known as opportunity cost . Trade-offs are all the alternatives that we give up whenever we choose one course of action over others.
What is opportunity cost and its importance in decision making?
“Opportunity cost is the cost of a foregone alternative . If you chose one alternative over another, then the cost of choosing that alternative is an opportunity cost. Opportunity cost is the benefits you lose by choosing one alternative over another one.”
How does scarcity affect decision making?
The ability to make decisions comes with a limited capacity. The scarcity state depletes this finite capacity of decision-making. ... The scarcity of money affects the decision to spend that money on the urgent needs while ignoring the other important things which comes with a burden of future cost.
