Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
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Question
Chapter 1, Problem 7MCQ
To determine
The question requires us to determine the definition of
Expert Solution & Answer
Explanation of Solution
An opportunity cost is the next best alternative option chosen by a person to get something else.
Suppose a person always prefers reading books over listening to audio. If he chooses to read the book, then the listening audio will be his opportunity cost for reading the book.
If a student has two options; taking an online class or earning through hourly freelancing, then for a student, foregone freelancing payment is the opportunity cost of taking online classes.
So, opportunity cost is the next best value of alternatives that must be given up to gain something.
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