What do you mean by opportunity cost explain?
Asked by: Tad Beahan | Last update: July 31, 2022Score: 4.8/5 (46 votes)
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 do you mean by opportunity cost explain with an example?
The opportunity cost is time spent studying and that money to spend on something else. A farmer chooses to plant wheat; the opportunity cost is planting a different crop, or an alternate use of the resources (land and farm equipment). A commuter takes the train to work instead of driving.
What do you mean by opportunity cost explain with an example class 11?
Opportunity costs can be viewed as a trade off. Trade offs happen in decision making when one option is chosen over another option. Opportunity costs sums up the total cost for that trade off. For example, a certain kind of bamboo can be used to produce both paper and furniture.
What is opportunity cost explain with example class 12?
In other words, the cost of enjoying more of one good in terms of sacrificing the benefit of another good is termed as opportunity cost of the additional unit of the good. Example: We have Rs 15,000 with two choices a) to invest in the shares of a company XYZ or b) to make a fixed deposit which gives interest 9%.
What do you mean by opportunity cost explain with diagram?
The following diagram explains this: Opportunity Cost Graph – Let's assume that the farmer can produce either 50 quintals of rice (ON) or 40 quintals of wheat (OM) using this land. Now, if he produces rice, then he cannot produce wheat. Therefore, the OC of 50 quintals of rice (ON) is 40 quintals of wheat (OM).
Opportunity Cost Definition and Real World Examples
What is CBSE 11th opportunity cost?
Class 11: The Concept Of Opportunity Cost Notes - Class 11
Opportunity cost is the value of something when a particular course of action is chosen. Simply put, the opportunity cost is what you must forgo in order to get something.
What is opportunity cost 2nd PUC?
It is an additional cost incurred to produce an additional output. In other words it is the net additions to the total cost when one more unit of output is produced.
What is opportunity cost Mcq?
The opportunity cost of a given action is equal to the value foregone of all feasible alternative actions.
What is opportunity cost example in business?
They decide to buy themselves a new pair of shoes with the money. The opportunity cost in this situation is the ability to buy something else with the $50—they chose to buy shoes, and they are now missing out on the ability to buy something else. 3. A manufacturer gets two orders and can only fulfill one.
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 use every possible resource tactfully and efficiently and hence, maximize economic profits.
What is opportunity cost Quizizz?
The opportunity cost of a good is. its price in dollars and cents. the alternative goods forgone. the price of alternative goods foregone.
What is opportunity cost formula?
Opportunity cost is the benefit you forego in choosing one course of action over another. 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 opportunity cost of an item?
The concept of opportunity cost states that the cost of one item is the value of the next best option; in other words, the cost of one item is the value of the lost opportunity to do or consume something else.
What is cost in economics class 11?
Cost is the total expenditure incurred in producing a commodity. In economics, it is sum of total of actual expenditure incurred on inputs (i. e. explicit cost) and the imputed valued of inputs supplied by the owners (i. e. implicit cost).
What is cost Ncert?
C = Cost of production. Qx = Units of output x produced. In other words, the output-cost relationship for a firm is depicted by the cost function. The cost function depicts the least cost combination of inputs associated with different output levels.
What are the types of opportunity cost?
The two types of opportunity costs are explicit opportunity cost and implicit opportunity cost. Explicit opportunity cost has a direct monetary value.
What is opportunity cost in everyday life?
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.
What is the opportunity cost quizlet?
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.
What is Ricardo's opportunity cost?
What is Ricardo's opportunity cost? Choosing the promotion over time with his friends.
What are the characteristics of opportunity cost?
- Price. Perhaps one of the biggest factors is the price; although this can vary depending on income. ...
- Time. Everyone has the same 24 hours in a day. ...
- Effort. Time and effort are essentially interlinked. ...
- Utility. This is essentially the enjoyment or pleasure that the consumer receives.
What are the benefits of instant communication and sales for consumers?
What are the benefits of instant communication and sales? Companies can ship goods to customers in an instant. Businesses can be available for customers 24 hours a day. Customers can purchase goods and services online.
What is comparative advantage quizlet?
Comparative advantage refers to the ability to produce goods and services at a lower opportunity COST, not necessarily at a greater volume.
What is opportunity cost and example quizlet?
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.
What is opportunity cost Wikipedia?
When choosing an option among multiple alternatives, the opportunity cost is the gain from the alternative we forgo when making a decision. In simple terms, opportunity cost is our perceived benefit of not choosing the next best option when resources are limited.