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 an opportunity cost example?

A student spends three hours and $20 at the movies the night before an exam. 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).

What is the opportunity cost of a product?

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. The word “cost” is commonly used in daily speech or in the news.

How do you find the opportunity cost of something?

The formula for calculating an opportunity cost is simply the difference between the expected returns of each option.

What is opportunity cost simple words?

Opportunity cost is an economics term that refers to the value of what you have to give up in order to choose something else. In a nutshell, it’s a value of the road not taken.

What is another word for opportunity cost?

Synonyms

  • value.
  • assessment.
  • monetary value.
  • average cost.
  • marginal cost.
  • incremental cost.
  • expensiveness.
  • price.

Which of these best describes an opportunity cost?

The correct answer is The difference between the alternative selected and the next best alternative.

What is the opportunity cost of seeing a movie?

The opportunity cost of watching a movie involves the time and resources that a person used in watching a movie as opposed to another activity.

How do you calculate opportunity cost from a table?


Quote from video: And if he spends an additional hour he can make 20 philly cheese sticks so in an hour. This is how much he can produce of each of those items in one hour he can produce 20 philly cheesesteaks.

What is opportunity and example?

The definition of an opportunity is an favorable situation for a positive outcome. An example of opportunity is a lunch meeting with a possible employer. noun.

What are the 2 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.

Which of the following is not an opportunity cost?

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.

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.

Which scenario is the best example of opportunity cost?

For example, choosing public transportation to travel to a particular destination by foregoing the option of traveling in one’s own car is a good example of opportunity cost, because you end up saving money which needs to be spent on fuel.

Which of these best describes an opportunity cost?

The correct answer is The difference between the alternative selected and the next best alternative.

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 true opportunity cost?

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.

What 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.