What is opportunity cost explain with example?
Asked by: Lempi Nitzsche | Last update: November 30, 2022Score: 4.8/5 (63 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 is opportunity cost give 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 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?
Opportunity costs represent the potential benefits that an individual, investor, or business misses out on when choosing one alternative over another. Because opportunity costs are unseen by definition, they can be easily overlooked.
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.
Opportunity Cost Definition and Real World Examples
What is opportunity cost Class 11?
Opportunity cost is a concept in Economics that is defined as those values or benefits that are lost by a business, business owners or organisations when they choose one option or an alternative option over another option, in the course of making business decisions.
What is opportunity cost explain graphically?
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).
What is opportunity cost explain with the help of a numerical example class 11?
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 is opportunity cost Class 9?
Opportunity cost is a concept in Economics that is defined as those values or benefits that are lost by a business, business owners or organisations when they choose one option or an alternative option over another option, in the course of making business decisions.
Which answer best defines opportunity cost?
Opportunity cost is defined as the value of the next best alternative.
What is opportunity cost Mcq?
The opportunity cost of a given action is equal to the value foregone of all feasible alternative actions.
How do you explain opportunity cost to a child?
Before or after your child makes their choice – remind them they can only have one — have them name their 2nd favorite choice as well. This 2nd choice is the opportunity cost. In other words, the cost of missing out on the next best alternative.
Which situation is the best example of opportunity cost quizlet?
Which situation is the best example of opportunity cost? A country chooses to produce bananas instead of wheat. How does specialization enable countries to trade with one another? A country can make and sell goods affordably and buy goods that it is inefficient at making.
Which of the following is an example of opportunity cost quizlet?
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.
What is opportunity cost for 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 in economics class 11 ISC?
Opportunity Costs in economics are the benefits that an individual, investor or business forego (miss out) , when they choose one alternative over another. Opportunity Cost is the next best alternative, which is foregone, when a particular alternative is chosen.
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 opportunity cost explain with the help of a numerical example Brainly?
In microeconomy, the opportunity cost is also known as alternative cost and is also used in calculating cost benefits or analyzing a project in terms of best alternative while making a choice. For example, Dev has three career offers to choose from. Job X has a salary offer of Rs 60000, job Y offer is Rs.
Why is opportunity cost important in economics?
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 definition of 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.
What is the opportunity cost of an investment quizlet?
The opportunity cost of capital is the best available expected return offered in the market on an investment of comparable risk and term to the cash flow being discounted.
What is one example of an opportunity cost of free higher education?
Under free higher education, students do bear some risk. If they choose to forego two or four years of being in the workforce, they have to bear the opportunity cost of missing out on this income. They also have to pay for living expenses and books.
What is meant by opportunity cost in education?
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.
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.