Opportunity costs represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another.
What is an opportunity cost quizlet?
opportunity cost. the most desirable alternative given up as the result of a decision.
What is opportunity cost concept?
Economists use the term opportunity cost to indicate what must be given up to obtain something that’s desired. … The idea behind opportunity cost is that the cost of one item is the lost opportunity to do or consume something else; in short, opportunity cost is the value of the next best alternative.
What is an opportunity cost Mcq?
The opportunity cost of a given action is equal to the value foregone of all feasible alternative actions. … Opportunity costs only measure direct out of pocket expenditures.
Why is opportunity cost?
Opportunity costs represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. Because opportunity costs are, by definition, unseen, they can be easily overlooked.
Which best describes an opportunity cost quizlet?
What is opportunity cost? The most desirable alternative given up as a result of a decision.
What are examples of opportunity costs?
- Someone gives up going to see a movie to study for a test in order to get a good grade. …
- At the ice cream parlor, you have to choose between rocky road and strawberry. …
- A player attends baseball training to be a better player instead of taking a vacation.
Which situation best describes an opportunity cost?
The correct answer is b. Benefits foregone by not choosing an alternative course of action. Opportunity cost is the future income or cost that…
Why is opportunity cost important in decision making?
With the opportunity cost, you will consider the fact that when you make a choice, you have to sacrifice other options. This helps make more economically accurate decisions that maximize your resources.
What is opportunity cost in economics class 11?
What is Opportunity Cost in Economics ? Opportunity Costs 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 variable cost Mcq?
Explanation : Variable cost per unit remains constant irrespective of the level of output. A variable cost is a corporate expense that changes in proportion to production output.
What is opportunity cost in economics class 12?
Opportunity cost of an activity (or good) is equal to the value of the next best alternative foregone. It is the cost of foregone alternative.
What is opportunity cost formula?
The Formula for Opportunity Cost is: Opportunity Cost = Total Revenue – Economic Profit. Opportunity Cost = What One Sacrifice / What One Gain.
What is another word for opportunity cost?
Hypernym for Opportunity cost:
cost of capital, carrying cost, capital cost, carrying charge.
Which of the following best describes the opportunity cost of an action?
Which of the following best describes the opportunity cost of an action? It is a subjective valuation that can be determined only by the individual who chooses the action.
What is the best definition of marginal cost?
Marginal cost refers to the increase or decrease in the cost of producing one more unit or serving one more customer. It is also known as incremental cost.
How is opportunity cost important to an individual?
Opportunity Cost: By choosing to go to spend time and money on things like classes and computers, you are necessarily choosing not to spend it on something else, like going on vacation. … By doing so, individuals are maximizing the amount that they can get out of their resources (time, money, effort, etc.).
What is opportunity cost 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%.
How is opportunity cost important to the government?
(ii) Importance of opportunity cost to the Government: It helps the government in deciding which sector will receive more resources. It helps the government in making decision on how to spend its revenue in carrying out its numerous projects, e.g. the government may allocate more resources to defence or infrastructure.
How opportunity cost affect decision making?
“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 is opportunity cost in economics Upsc?
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 with the help of example class 11?
Opportunity cost is the next best alternative foregone in choosing the best one. Suppose an economy produces only two goods X and Y. … if the economy decides to produce 2X, it has to cut down production of Y by 2 units because resources are limited. in this case opportunity cost of producing one more unit of X is 2Y.
What is variable cost example?
A variable cost is a corporate expense that changes in proportion to how much a company produces or sells. … Examples of variable costs include a manufacturing company’s costs of raw materials and packaging—or a retail company’s credit card transaction fees or shipping expenses, which rise or fall with sales.
What is variable cost formula?
To calculate variable costs, multiply what it costs to make one unit of your product by the total number of products you’ve created. This formula looks like this: Total Variable Costs = Cost Per Unit x Total Number of Units. … So, you’ll need to produce more units to actually turn a profit.
What is variable cost and marginal cost?
Marginal costs are a function of the total cost of production, which includes fixed and variable costs. Fixed costs of production are constant, occur regularly, and do not change in the short-term with changes in production. … By contrast, a variable cost is one that changes based on production output and costs.
What is opportunity cost and marginal opportunity cost?
Opportunity cost is an economic or financial concept that expresses the relationship between scarcity and choice while marginal cost is an economic or financial concept that represents the cost of producing an additional unit.
What does real cost mean?
The cost of producing a good or service, including the cost of all resources used and the cost of not employing those resources in alternative uses.
What is the opposite word of opportunity?
4 Answers. In business management context, the antonym of ‘opportunity’ is ‘threat‘. An ‘opportunity’ by definition is a circumstance where one has possibility of gaining some benefit, and a ‘threat’ is exactly the opposite – a circumstance where one has possibility of some loss.
Opportunity cost is the cost of a decision in terms of the best alternative given up in order to achieve it. It is the best alternative forgone.
Whats the opposite of opportunity cost?
Simply stated, an opportunity cost is the cost of a missed opportunity. It is the opposite of the benefit that would have been gained had an action, not taken, been taken—the missed opportunity. This is a concept used in economics.
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