Opportunity cost

What is opportunity cost? 

• The explicit monetary cost of a decision.

• The value of the next best alternative when a decision is made.

• The total cost of all available options.

• The cost of producing an additional unit of a good.

Which of the following best describes opportunity cost? 

• The highest price you're willing to pay for a product. 

• The total expenses associated with a particular choice.

• The potential benefits you gain from a decision

• The value of the benefits you forgot when making a choice

Opportunity cost is always measured in monetary terms. 

• True

• False

When making a decision, what does opportunity cost help you understand? 

• The exact monetary cost of the choice.  

• The maximum potential gain from the decision.  

• The trade-off between different alternatives.  

• The probability of success is associated with the choice. 

In a trade-off scenario, opportunity cost represents:

• The actual cost of the chosen option.  

• The potential gain from the choice made.  

• The cost of all available alternatives

• The time spent making the decision. 

Why is opportunity cost an important concept in economics? 

• It helps determine the actual cost of a decision.

• It allows for easy comparison of monetary values.  

• It reflects the true cost of a choice in terms of forgone alternatives.

• It simplifies complex economic models.

Can opportunity cost change over time?

• Yes, but only if there's inflation.

• No, it remains constant for all decisions.  

• Yes, as circumstances and choices change.  

• No, it's always fixed. 

When resources are allocated efficiently, what does it mean in terms of opportunity cost? 

• Opportunity cost is maximized.  

• Opportunity cost is minimized.  

• Opportunity cost is irrelevant.

• Opportunity cost fluctuates.

Opportunity cost only includes tangible costs and benefits, not intangible ones.

• True

• False

Which of the following best explains the concept of increasing opportunity cost?

• The cost of production increases over time.  

• The opportunity cost of a choice rises as more of that choice is made.  

• The cost of living consistently decreases. 

• Opportunity cost remains constant regardless of the situation.