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 opportunity cost defined as?
“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.
What is opportunity cost of a decision quizlet?
Opportunity cost is the value of the best alternative forgone in making any choice.
Which best describes an opportunity cost quizlet?
Which statement best describes opportunity cost? Opportunity cost is the value in dollars of a trade-off.
Which best defines opportunity cost?
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 the opportunity cost of a decision *?
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.
What causes opportunity cost?
As a representation of the relationship between scarcity and choice, the objective of opportunity cost is to ensure efficient use of scarce resources. It incorporates all associated costs of a decision, both explicit and implicit.
Which answer best describes opportunity cost?
The correct answer is The difference between the alternative selected and the next best alternative.
Which phrase best describes an opportunity cost?
Opportunity cost is the least desirable alternative given up as a result of a decision.
What is opportunity cost and example?
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.
What is an opportunity cost Everfi?
Opportunity cost. the cost you pay when you give up something to get something else. Inflation.
Why is opportunity cost important in decision-making?
The concept of opportunity cost is used in decision-making to help individuals and organizations make better choices, primarily by considering the alternatives. Opportunity costs incorporate the cost and benefit of each choice, which can at times be challenging to estimate. Opportunity costs are forward-looking.
How does opportunity cost affect economic decision-making?
In business, opportunity costs play a major role in decision-making. If you decide to purchase a new piece of equipment, your opportunity cost is the money spent elsewhere. Companies must take both explicit and implicit costs into account when making rational business decisions.
Which of the following describes opportunity cost?
How do you determine opportunity cost?
What you sacrifice / What you gain = opportunity costs.
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.
Which of these best describes an opportunity cost?
What is opportunity cost in economics example?
Opportunity cost requires trade-offs between two or more options. One is chosen and the others are foregone. In economics, it is assumed that this chosen option is the most valued and most optimal. So when a consumer purchases a Starbucks, its value is greater than the $5 paid for it.
Why opportunity cost is 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.