opportunity cost exercises with answers

1. What is opportunity cost explain with example?
2. How do you solve for opportunity cost?
3. Which example illustrates opportunity cost?
4. What is an example of opportunity cost in your life?
5. Why is opportunity cost important?
6. What is opportunity cost in this scenario?
7. Why is opportunity cost increasing?
8. What is the law of opportunity cost?
9. What is the opportunity cost of opting for higher studies rather than a job?
10. What is the opportunity cost of an item?
11. How do you explain opportunity cost to a child?

What is opportunity cost explain with example?

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.

How do you solve for opportunity cost?

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

Which example illustrates opportunity cost?

the value of the next best alternative to any decision you make; for example, if Abby can spend her time either watching videos or studying, the opportunity cost of an hour watching videos is the hour of studying she gives up to do that.

What is an example of opportunity cost in your life?

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).

Why is opportunity cost important?

Opportunity Cost helps a manufacturer to determine whether to produce or not. He can assess the economic benefit of going for a production activity by comparing it with the option of not producing at all. He may invest the same amount of money, time, and resources in another business or Opportunity.

What is opportunity cost in this scenario?

The opportunity cost in this scenario is the three lost opportunities Harry experiences by deciding to go to his parents house. The term opportunity cost refers to the loss of potential gain from other alternatives when one alternative is chosen.

Why is opportunity cost increasing?

Increasing opportunity costs occurs when you produce more and more of one good and you give up more and more of another good. This occurs when resources are less adaptable when moving from the production of one good to the production of another good.

What is the law of opportunity cost?

The law of increasing opportunity cost is an economic principle that describes how opportunity costs increase as resources are applied. (In other words, each time resources are allocated, there is a cost of using them for one purpose over another.)

What is the opportunity cost of opting for higher studies rather than a job?

Because you chose to go to college instead of working, your opportunity cost is actually the sum of your college expenses plus the money you could have earned had you chosen not to work.

What is the opportunity cost of an item?

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.

How do you explain opportunity cost to a child?

Opportunity cost is the value of the next best thing you give up whenever you make a decision. It is "the loss of potential gain from other alternatives when one alternative is chosen".