4 Questions
Opportunity cost is the second best alternative foregone.
The Cost of Something is What You Give Up to Get It
Marginal changes are small, incremental changes to an existing plan of action
Rational People Think at the Margin
People Respond to Incentives. Incentive is something that causes a person to act. Because people use cost and benefit analysis, they also respond to incentives
People will only take action of the marginal benefit exceed the marginal cost
Trade allows countries to specialize according to their comparative advantages and to enjoy a greater variety of goods and services
Trade Can Make Everyone Better Off
Test your knowledge on opportunity cost, which is the value of the next best alternative that must be forgone in order to pursue a different option. Explore scenarios where decisions involve weighing the benefits of various choices against the sacrifices made.
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