Podcast
Play an AI-generated podcast conversation about this lesson
Questions and Answers
What is the definition of opportunity cost?
What is the definition of opportunity cost?
- The average cost of several investment options
- The guaranteed return from a particular investment
- The benefit lost when one alternative is chosen over another (correct)
- The total cost incurred by an investor in a project
Which of the following scenarios best exemplifies opportunity cost?
Which of the following scenarios best exemplifies opportunity cost?
- An individual spends their savings on a vacation rather than investing it. (correct)
- A student selects a major that does not offer many job opportunities.
- An investor decides to put $1000 into stocks instead of savings, losing interest income. (correct)
- A business allocates funds for marketing instead of product development, resulting in lower sales. (correct)
Which situation does NOT illustrate opportunity cost?
Which situation does NOT illustrate opportunity cost?
- Buying a new car instead of a used one, leading to higher ongoing costs.
- Choosing to work overtime instead of spending time with family.
- Forgetting to renew a subscription and losing access to services. (correct)
- Investing in renewable energy over fossil fuels due to ethical considerations.
In business decisions, what is often considered when assessing opportunity costs?
In business decisions, what is often considered when assessing opportunity costs?
Signup and view all the answers
How can opportunity costs influence decision-making for an investor?
How can opportunity costs influence decision-making for an investor?
Signup and view all the answers
