Opportunity cost(Chapter 4)

Question 1

Definition of Opportunity cost

Answer 1

In the same way as individuals are forced to make choices due to scarce resources businesses and governments also have to make decisions hence opportunity cost is the cost or benefit of the next best alternative given up

Question 2

Opportunity cost formula

Answer 2

What you are sacrificing / What are you gaining

Question 3

Example: It takes you half an hour to do a math assignment and two hours to do a micro assignment. What is the opportunity cost of you doing two math assignments?

Answer 3

1/2 micro assignments = 1/2 of the micro assignment(loosing)/1 math assignment(gaining)