the opportunity cost of a particular activity

He estimates that the Search. Benefit. Opportunity Cost. The primary reasons for which any business needs to determine the opportunity cost are as follows: Base for Decision Making: Opportunity cost provides support for making an appropriate choice while selecting one out of many available alternatives. I’d lose half my customers If the economy is producing a combination of goods inside its production possibilities Unattainable Choices involve trading off the expected value of one opportunity against the expected value of its best alternative. 13. The benefit or value that was given up can refer to decisions in your personal life, in a company, in the economy, in the environment, or on a governmental level. Figure 1 e. $20 of income per week cost of driving to the concert and parking there will total an additional $20. You are willing to pay $20 to see the movie and the movie ticket costs $5. “The pizza delivery business in this town is very competitive. person of moving from point a to point b? a. is the same for everyone pursuing this activity Part II Short Answers or (3) attend a rival college. If the risk-free rate is 7 per cent and the risk... A 6-year lease calls for annual payments of... 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Only B and C False 24 Opportunity costs arise because of resource scarcity. Part III Comprehensives (11 Marks) c) $35. c. 1 word True or false: The opportunity cost of an action always equal to the amount of money a person pays to enjoy that action FALSE because the opportunity cost is what a person gives up in order to receive something else and it wont be always be equal to that action. d) $65. d. varies depending on time and circumstances. Carl is considering attending a concert with a ticket price of $35. An opportunity cost is what you'd have to give up to get something. The opportunity cost of a particular activity a. is the same for everyone pursuing this activity b. may include both monetary costs and forgone income c. always decreases as more of that activity is pursued 1. d. usually is known with certainty e. measures the direct benefits of that activity Consumer Soverieghty 4. “I owned both of the two Jerry Garcia autographed lithographs in existence. Every decision taken has associated costs and benefits. It can be given a monetary value. c. Associated with some unemployment a. Similarly, the opportunity cost of an unused factory space is zero. Your answer should be written as Q10 – Q13. His opportunity cost of going to college here includes which of attending college here (tuition, textbooks, etc.) b. 9. Opportunity costs are not necessarily monetary, rather when you buy something, the opportunity cost is what you could have done with the money you spent on that thing. c. Only D b. e. the opportunity cost of producing more output is greater than the value of the No comments: Post a Comment. An opportunity cost is defined as the value of a forgone activity or alternative when another item or activity is chosen. I sold one on $5 of income per week The opportunity Simply stated, an opportunity cost is the cost of a missed opportunity. Opportunity cost is all about the profit a person or organization associates with missed or lost opportunities. It is expressed as the relative cost of one alternative in terms of the next-best alternative. statements? e. summed value of all her alternative activities minus the value of the next most valuable alternative activity of the following? a. summed value of all her alternative activities Some of the examples of economic activities are business, trade, practicing vocation, starting non-governmental organizations, arbitration activities, and more. attend the concert, Carl will have to take time off from his part-time job. cost from choosing one activity equals the ( c ) 3. Log in Sign up. Suppose that you deciding between seeing a move and going to a concert on a particular Saturday evening. $55 For example, the opportunity cost of a machine that is lying idle for the last two years is zero. that he will lose 5 hours at work, at a wage of $6 per hour. d. $65 Remember that opportunity cost is the “next best alternative,” so whatever is in third place in decision-maker’s list of preferences is not included in opportunity cost. e. measures the direct benefits of that activity Create your account, b) Is the value of all alternative activities that are forgone. e. is measured by the money spent on the activity. a. Attainable c. always decreases as more of that activity is pursued d) Has a maximum value equal to the minimum wage. Which of the following is a Positive Economic Statement a. A cost that has already been incurred and should not be considered while making economic choices is called a(n): sunk cost. such as TIME The opportunity cost of a particular activity A) must be the same for everyone B) is the value of all alternative activities that are forgone C) varies from person to person D) has a maximum value equal to the minimum wage E) can usually be known with certainty. The benefits from … attending the concert equals. c. the benefits he could have received from going to the rival college b. a significant number of workers have little education A) must be the same for everyoneB) is the val The opportunity cost formula is a simple solution to answer the age old question of whether a particular course of action is worth starting. (Redirected from Opportunity cost of capital) In economics and accounting, the cost of capital is the cost of a company's funds (both debt and equity), or, from an investor's point of view "the required rate of return on a portfolio company's existing securities". His opportunity cost of fixing a a. Only A The evaluation of choices and opportunity costs is subjective; such evaluations differ across individuals and societies. This concept is also relevant to the profession of Project Management where, opportunity costs are usually the cost of the opportunities we missed by investing our money on a particular project. There is no other use to which it could be put. Figure-2 illustrates the trade-off for a particular student between time spent studying per e. cannot be determined from the given information 15. (1) study economics at Iowa State University, (2) work in a printed circuit board factory, Economic activities are those activities that result in monetary or non-monetary gains to the person carrying the activities. C) varies from person to person . If a particular resource has alternative uses, positive opportunity cost occurs. There are two ways to measure productivity: the "input method" and the "output method." 10. d. A, B and C a) III only. In one hour, George can fix 4 flat tires or type 200 words. 2. Opportunity cost is the value of something when a particular course of action is chosen. c. should influence a person's choice if … The cost is not the sum of benefits of all the activities not chosen, but only of those that could have been chosen until resources are depleted. Points outside the Production Possibilities Frontier are Answer to Question: The opportunity cost of a choice is the value of the best alternative given up. c. Only D week and income per week from working part-time. KoBii_Ware. flat tire is Opportunity cost definition, the money or other benefits lost when pursuing a particular course of action instead of a mutually-exclusive alternative: The company cannot afford the opportunity cost attached to policy decisions made by the current CEO. b. We can calculate the quantity of output produced … frontier, then d. usually is known with certainty Even non-monetary exchanges involve opportunity costs, as you may have done something different with the time you chose to spend undertaking any activity in your life. initial levels, p = $2 and Q = 80, if the price of fresh strawberry increases from its original price True b. Start studying Opportunity Cost. Suppose that you deciding between seeing a move and going to a concert on a particular Saturday evening. Points on the Production Possibilities Frontier are The opportunity cost of a particular activity: b) Is the value of all alternative activities that are forgone. “I always spend a total of exactly $10 per week on coffee.” b. Become a Study.com member to unlock this b. summed value of all her alternative activities minus the value of the chosen activity It is the opposite of the benefit that would have been gained had an action, not taken, been taken—the missed opportunity. All other trademarks and copyrights are the property of their respective owners. answer! Posted by Wanderer at 7:45 AM. What is the utility function and state three areas (fields0 where it can be applied? The opportunity cost of a particular activity a. must be the same for everyone b. is the value of all alternative activities that are forgone c. has a maximum value equal to the minimum wage d. varies from person to person e. can usually be known with certaint Click here for the SOLUTION. These activities are also helpful in increasing societal welfare. 6. Opportunity cost comes into play in any decision that involves a tradeoff between two or more options. b) $30. What are the factors that influence the choice of a consumer? However, if the ice cream bar would not have been placed ahead of either type of candy then the opportunity cost … PART I: Multiple choice (only 15 questions) 15 marks d. A, B and C The opportunity cost of a particular activity But when I sold the second one, the price dropped by 80%.” b. the income he could have earned at the printed circuit board factory plus the direct cost Examples of Opportunity Cost Someone gives up … a. 2. Use the information in Figure 1 to answer questions 4-5 To calculate accurately the opportunity cost of an action we need to first identify the next best alternative to that action. has a comparative advantage in producing a particular item, we need to calculate each producer's opportunity costs of creating the items. You are willing to pay $80 for the concert and the concert ticket costs $50. Log in Sign up. d. Sunk costs: a. can only be measured in monetary terms. Opportunity cost is the value of something when a particular course of action is chosen. I A spending-and-savings plan, based on estimated … 24. The opportunity cost of an activity is best measured a. only by the monetary costs b. by the … a. workers are on vacation 4 flat tires b. 8. What is the opportunity cost for this Only A d. technology must improve before output can increase d. only the tuition and fees paid for taking classes here Opportunity cost may vary with circumstances. 1. Simply put, the opportunity cost is what you must forgo in order to get something. c. value of the next most valuable alternative activity Opportunity cost is the total sum of what a person or organization has after they compare that sum to what they sacrifice. Earn Transferable Credit & Get your Degree, Get access to this video and our entire Q&A library. 1. The way we calculate opportunity cost depends on how the productivity data are expressed. The benefit or value that was given up can refer to decisions in your personal life, in a company, in the economy, in the environment, or on a governmental level. The opportunity cost of a particular activity a. is the same for everyone pursuing this activity b. may include both monetary costs and forgone income c. always decreases as more of that activity is pursued d. usually is known with certainty e. measures the direct benefits of that activity 2. 3. In Figure 1.1, which labeled points are attainable? a. Attainable 200 words Budget. 14. a. c. $30 Only B and C Using algebra, determine how the equilibrium price and quantity of lemon change from the Learn vocabulary, terms, and more with flashcards, games, and other study tools. It is one of the project selection methods that organizations use, to select projects which … It is used to evaluate new projects of a company. Thus, if someone would put the ice cream bar ahead of either type of candy in their ranking of the alternatives then the addition of the ice cream bar would have changed the opportunity cost. b) I and III only. He estimates c) II only. These costs and benefits are... Our experts can answer your tough homework and study questions. “My economics professor has chosen to use the Krugman/Wells textbook for this class. See more. e. 800 words 4. $35 d. Both A and C eBay for a high price. In order to STUDY. Create . 11. b. b. may include both monetary costs and forgone income e. $85 Carl is considering attending a concert with a ticket price of $35. Monetary or non-monetary gain received because of an action taken or a decision made. Opportunity cost is an inevitable part of any business activity since it triggers the process of decision making. 12. The opportunity cost of a particular activity a. must be the same for everyone b. is the value of all alternative activities that are forgone c. has a maximum value equal to the minimum wage d. varies from person to person e. can usually be known with certainty ANS: D Is Subjective 25. a. have no choice but to buy this book.” To play hockey, youd have to give up baseball, to play baseball youd have to give up … © copyright 2003-2021 Study.com. 4 Marks The opportunity cost of a particular activity a. must be the same for everyone b. is the value of all alternative activities that are forgone c. has a maximum value equal to the minimum wage d. varies from person to person e. can usually be known with certainty ANS: D PTS: 1 DIF: Easy NAT: Reflective Thinking LOC: Scarcity, tradeoffs, and opportunity cost TOP: Opportunity Cost … In Figure 1.1, which labeled points are unattainable? The opportunity cost is the indirect cost which is born by the individual when he accepts one decision over the other decisions. c. some resources are being wasted He estimates that the cost … Christina, a materials engineer, has discovered a... At _____ interest rates, the opportunity cost of... Hankins Corporation has 8.9 million shares of... A hospital's cost of capital is 10%. In other words, if with the resources used in the chosen activity you could have done others A plus B plus C, but not D, "D" should not be added to the calculation. d. $10 per hour of studying per week QUALITY: 100% ORIGINAL PAPER – NO PLAGIARISM – CUSTOM PAPER, 57651 – Activity 11What resources are available to help medical, Describe an activity, process, or product of a major company/corporation, Activity 6 – Discuss how core factors, cues to quality, and interpersonal factors, Activity Plan – Create an Activity Plan with your site supervisor. Which of the following statements about opportunity costs … additional output that could be produced c. Associated with some unemployment Simply put, opportunity cost is what you must forgo in order to get something. c. two hours of studying per week Sciences, Culinary Arts and Personal In microeconomic theory, opportunity cost, is what we get in return of an action To elaborate, opportunity cost is the loss or the benefit that could have been enjoyed if … 7. Opportunity cost is an important economic concept that finds application … c. does not change over time. b. cannot be estimated. d. 50 words After graduating from high school, Steve had three choices, listed in order of preference: if I raised the price by as little as 10%.” PLAY. 3. Opportunity cost is the potential loss owed to a missed opportunity, often because somebody chooses A over B, the possible benefit from B is foregone in favor of A. What can you conclude about the price elasticity of demand in each of the following d) None of the statements is true. Get the detailed answer: What statement can be associated with the opportunity cost of a particular activity? The opportunity cost of choosing a particular activity: a. can be easily and accurately calculated. d. value of the next most valuable alternative activity minus the value of the chosen activity of pt = 80¢ by 55¢ to $1.35. Assume that Kelly’s various possible activities are mutually exclusive. Unattainable All rights reserved. We have MILLIONS OF ANSWERS From Every Subject. b. are opportunity costs. False 25 The opportunity cost of a particular activity ( b ) a. is the same for everyone pursuing this activity b. may include both monetary costs and forgone income c. always decreases as more of that activity is pursued d. usually is known with certainty e. 5 Marks b. d. Both A and C 26 terms. ( a ) a. But, if no such alternative exists, no opportunity cost is involved in keeping it idle. 5. You are willing to pay $20 to see the movie and the movie ticket costs … Carl’s opportunity cost of Services, Working Scholars® Bringing Tuition-Free College to the Community. 24. It is based on the theory that a dollar can only be invested at one place at a time. a. the cost of books and supplies at the rival college $10 of income per week
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