Opportunity cost is the forgone benefit that would have been derived by 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 describes opportunity cost?
“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. Louis Fed, in a recent Page One Economics: Money and Missed Opportunities.
Which of the following best describes opportunity costs?
The correct answer is The difference between the alternative selected and the next best alternative .
Which best describes an opportunity cost economics quizlet?
What is opportunity cost? The most desirable alternative given up as a result of a decision . Give an example of a business trade-off. An example would be an increase use of technology or an increase use of labor.
What is opportunity cost and example?
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.
What is a real life example of opportunity cost?
Examples of Opportunity Cost. 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.
Which scenario is the best example of an opportunity cost?
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 is the best definition of the term opportunity cost apex?
opportunity cost. The benefits of the best alternative option that are given up by a particular decision .
What is an example of scarcity?
Coal is used to create energy ; the limited amount of this resource that can be mined is an example of scarcity. A day has an absolute scarcity of time, as you cannot add more than 24 hours to its supply. Those without access to clean water experience a scarcity of water.
How does the opportunity cost of good r change as output of S increases?
How does the opportunity cost of Good R change as output of S increases? It decreases . ... When all resources are being used, making more of one good means making less of the other good. The downward slope of the curve represents tradeoffs.
Which of the following best describes the opportunity cost of a year of college?
10) Which of the following best describes the opportunity cost of one year of college? The dollar value of tuition, books , room and board, and all associated explicit expenses, but not the interest that could have been earned on that sum.
Which is an example of scarcity rather than shortage?
Which of the following is an example of scarcity, rather than shortage? A person wants an endless supply of everything but cannot have it . ... A scarcity occurs when there are limited quantities to meet unlimited wants, and a shortage occurs when a good or service is unavailable.
What is opportunity cost example in business?
Small businesses factor in opportunity costs when computing their operating expenses in order to provide a bid or estimate on the price of a job . For example, a landscaping firm may be bidding on two jobs each of which will use half of its equipment during a particular period of time.
Why is opportunity cost important?
The concept of Opportunity Cost helps us to choose the best possible option among all the available options . It helps us to use every possible resource tactfully, efficiently and hence, maximize economic profits.
What is a synonym for opportunity cost?
noun. Cost in terms of foregoing alternatives.
Antonyms. nonpayment income inexpensiveness expensiveness obviate. capital cost carrying charge cost of capital.
What are three types of opportunity cost?
Three phrases in the definition of opportunity cost warrant further discussion–alternative foregone, highest valued, and pursuit of an activity .
