Unit 3 Flashcards
1
Q
What is opportunity cost? Give examples.
A
The next best option given up by choosing another option. Example You have enough money to buy either a book or icecream, and you buy the book. Ice cream is your opportunity cost.
2
Q
How does opportunity cost influence decision making?
A
Consumers can not buy everything they want so have to make choices. Workers can not work at multiple places so they have to make choice. Producers can not make everything from limited resources so they have to make choice. Government can not spend its limited money on everything so it has to make choice.
