The opportunity cost of something is

    • Why is opportunity cost called a 'cost'?

      The Opportunity Cost is referred to the probable returns from the use of resources that are considered as a second-best option . This is the reason why it is also known as Alternative Cost. When a person has to give up a little in order to buy something else is called Opportunity Cost.


    • Does everything have an opportunity cost?

      Everything In Life Has An Opportunity Cost. You are here: In economics, opportunity cost is defined as the cost of not choosing the next, best alternative for your money or time. Everything in life has an opportunity cost. If you want to go to the movies with friends it means you can’t stay home and read a good book.


    • What are the effects of opportunity cost?

      Opportunity costs can impact various - and critical - aspects of your life, including money, career, home and family, and other lifestyle elements. In general, it means having to choose one option over the other, be it money, time or lifestyle choices - and living with the consequences.


    • What is the meaning of opportunity cost?

      opportunity cost. Definition. The cost of passing up the next best choice when making a decision. For example, if an asset such as capital is used for one purpose, the opportunity cost is the value of the next best purpose the asset could have been used for.


    • [PDF File]Principle #1: People Face Tradeoffs To get something you ...

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      To get something you want, you have to give up something else you want. Scarce ... opportunity cost--what you give up in order to obtain the item in question. Principle #3: Rational people think at the ... or an average cost of $500. Should you sell a standby seat "below cost"? Yes, since the …

      opportunity cost in economics


    • [PDF File]Chapter 1 What is Economics? Test bank MULTIPLE CHOICE ...

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      D)the accounting cost minus the marginal cost. 43) 44)The opportunity cost of any action is A)the time required but not the monetary cost. B)all the possible alternatives forgone. C)the highest-valued alternative forgone. D)the monetary cost but not the time required. 44) 45)The opportunity cost of something you decide to get is A)the amount of ...

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    • [PDF File]chapter 1

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      The real cost of something is what you must give up to get it. 1. Definition: The real cost of an item is its opportunity cost:what you must give up in order to get it. 2. Opportunity cost is not only monetary cost. 1. D. “How much?” is a decision at the margin. 1.

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    • [PDF File]02 stevensonwolfersecon1e 3786 ch01 001-034

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      1.3 The Opportunity Cost Principle The Opportunity Cost Principle: The true cost of something is the next best alternative you must give up to get it. Your decisions should reflect this opportunity cost, rather than just the out-of-pocket financial costs. 1.4 The Marginal Principle The Marginal Principle: Decisions

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    • [PDF File]Econ. 1A What is Economics? Economic Way of …

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      Net benefit = Benefit – cost. (2) Cost (what we must give up): The opportunity cost of something is the best thing we must give up to get it. It is the highest valued alternatives that we must give up to get it. (3) Benefit (gain measured by what we are willing to give up): The benefit of something is the gain or pleasure that it brings.

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    • [PDF File]Microeconomics Topic 1: “Explain the concept of ...

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      The opportunity cost of this capital is what Josephine could have earned if she had taken the money and invested it elsewhere. If the rate of return on her best alternative investment opportunity is 10%, the implicit cost of capital is $10,000. This would be added to her other explicit costs of doing business to compute the opportunity cost.

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    • [PDF File]Lesson 5 Economic Choice and Opportunity Cost

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      opportunity cost. Define the term as follows: Opportunity cost is the highest-valued alternative a person has to give up when making a choice. 12. Tell the students that Mario decided he liked Alternative 2 (clothes) best. He liked Alternative 3 (season ticket) second best, and …

      the opportunity cost of working is the


    • [PDF File]Scarcity, Opportunity Cost, and Trade

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      to get something, you have to give up something else. To make a smart choice, the value of what you get must be greater than the value of what you give up. The benefits of a smart choice must outweigh the opportunity cost. 1.2 Give It Up for Opportunity Cost! Opportunity Cost Define and describe opportunity cost. If there were an official ...

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    • [DOC File]Chapter 1

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      74. Refer to Exhibit 2-5. The opportunity cost of moving from point A to point B is. a. 5,000 televisions. b. 5,000 fax machines. c. 10,000 televisions. d. 10,000 fax machines. ANS: A PTS: 1 DIF: Moderate NAT: Analytic. LOC: Scarcity, tradeoffs, and opportunity cost NOT: NEW. 75. Refer to Exhibit 2-5. The opportunity cost of moving from point D ...

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    • [DOC File]Opportunity Cost of Capital

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      7. Principle #2 is also shown on the production possibilities frontier: The cost of something is what you give up to get it (opportunity cost). a. The opportunity cost of increasing the production of cars from 600 to 700 is 200 computers. b. Thus, the opportunity cost of each car is two computers. 8.

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    • [DOC File]Sample Questions for Case & Fair, Principles of Economics ...

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      The “net present value” rule says to accept the distribution of cash flow {C 1}, with expected value C 1, in exchange for investment C 0 whenever C 1 / (1 + r) > C 0 where the rate r used to discount cash flow is the “opportunity cost of capital” associated with the distribution of cash flow {C 1}.

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    • [DOC File]Opportunity Cost - White Plains Middle School

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      Explain the economic concept of opportunity cost. The opportunity cost of something is the best alternative that we give up when we make a choice or a decision. Difficulty: E Type: D Suppose you have saved $300. You can spend it on a new stereo or on a weekend skiing trip. What is the opportunity cost of going on the skiing trip?

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    • [DOC File]Sunk and Opportunity Costs - The Citadel

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      Whenever a choice is made, something is given up. The opportunity cost of a choice is the value of the best alternative given up. GRADE 8: Choices involve trading off the expected value of one opportunity against the expected value of its best alternative.

      what does opportunity cost mean


    • [DOC File]Chapter 2—Economic Activities: Producing and Trading

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      Every choice involves a trade-off, that is, you must give something up if you want to get something. Whatever you give up is your opportunity cost. If you choose to use your resources in one way, then the real cost of that choice is the lost opportunity to use the resources in some other way.

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    • [DOC File]Chapter 1-Scarcity, Choice, and Opportunity Cost

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      Perhaps the most important information we get from the study of opportunity cost is the realization that we always give something else up whenever we get something. Choosing is refusing. Therefore, we want to make certain that what we get is better than what we give up. That what we get benefits us more.

      the opportunity cost of working is the


    • [DOC File]HOW ANY WILL YOU BUY

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      That is an opportunity cost and that matters. After the $10 million has been spent, then that is no longer an opportunity cost. It is a sunk cost. An opportunity cost would be the resale value of the machine. Suppose you could sell it for $4 million. Then the cost of using the machine is $4 million, not the $10 million that had been paid.

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    • Opportunity-cost dictionary definition | opportunity-cost ...

      -Decrease the opportunity cost of doing something ---> Do more of it. Section 3—Production Possibilities Curve. Production Possibilities Curve-A graph showing alternative ways to use an economy’s productive resources. Guns Butter 0 15 8 14 14 12 18 9 20 5 21 0

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    • [DOC File]ECONOMICS for Elementary Teachers: Econ 3053

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      May 29, 2009 · An opportunity cost is the cost of what we give up every time we make a choice. No matter what decisions we make, something else must be given up. Many decisions are going to be based on our personal viewpoints. However, companies try to break down decision into two mutually exclusive situations. Let’s take the first example: a.

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