Chapter 3: Opportunity Cost

Question 1

What is opportunity cost?

Answer 1

The best alternative decision forgone

Question 2

What do consumers face(relate to opportunity cost)

Answer 2

Consumers can’t buy everything they like. They need to choose which product they would like to buy, their choice will tend to settle on two of them. The option they don’t choose is the opportunity cost.

Question 3

What do workers face(relate to opportunity cost)

Answer 3

Workers need to carefully consider their preferences for the jobs available. Their preferences are influenced by a number of factors: wage paid, chances of promotion, and job satisfaction.

Question 4

What do producers face(relate to opportunity cost)

Answer 4

Producers have to decide what to make(private sector firms will tend to choose the option that gives them the maximum profit)

Question 5

What does the government face(relate to opportunity cost)

Answer 5

The government has to carefully consider its expenditure of tax revenue on various things.

Question 6

What doesn’t have an opportunity cost?

(Mentioned in chapter 1)

Answer 6

Free goods

Question 7

Discuss the opportunity cost of these(there are many answers so you most likely won’t have the same answers shown):

1. Buying Ice cream
2. Eating a burger for dinner
3. Visiting the beach
4. The government spending money on infrastructure
5. Playing video games

Answer 7

1. Buying a chocolate bar/ buying a lollipop
2. Eating pasta/ Eating a salad
3. Visiting a museum/ Staying at home
4. The government spending money on education/ on healthcare
5. Studying