Search results
People also ask
What is opportunity cost?
What is the opportunity cost of studying economics?
Why is opportunity cost analysis important?
What is the opportunity cost of a choice?
Apr 1, 2024 · Learn what opportunity cost is and how to calculate it for business and personal decisions. See examples of opportunity cost analysis and how it differs from sunk cost.
- Jason Fernando
- 2 min
Mar 29, 2019 · Definition – Opportunity cost is the next best alternative foregone. If we spend that £20 on a textbook, the opportunity cost is the restaurant meal we cannot afford to pay. If you decide to spend two hours studying on a Friday night. The opportunity cost is that you cannot have those two hours for leisure.
Learn how to calculate opportunity cost and marginal cost using a simple example of catching rabbits and gathering berries. Watch a video and read the transcript to understand the concepts and see the production possibilities curve.
- 6 min
- Sal Khan
- The Marginal Cost is generally different from the Opportunity Cost in concept. However the Marginal Cost gets equal to the Opportunity Cost only wh...
- Opportunity cost expresses the relationship between scarcity and choice, while marginal cost represents the cost of producing an additional unit.
- The first few rabbits are the easier rabbits to catch. When the hunter-gatherer tries to get more though, he can't keep going after only easy rabbi...
- They are beyond what you are physically capable of producing. If you can type 40 words per minute, it would be impossible for me to ask you to type...
- Marginal Cost is how much it would cost to produce one more unit (or, how much cost would be saved by producing one less). Opportunity Cost is the...
- It can be a straight line and it would mean that catching a rabbit will require the same amount of time/effort as gathering fixed amount of berries...
- normal good means that there is a direct relationship btwn demand and income. As income inc so will demand from my understanding
- demand is the need for the supply by the general public. For instance, there is a high demand for heat (gas) in the winter time and a relatively lo...
- We do come across these situations in everyday life, though not with berries (unless you hunt for a living). Imagine the real-life situation when y...
Learn how to use the production possibilities curve (PPC) to illustrate the tradeoffs and opportunity costs of producing two goods. See examples, graphs, equations, and key terms related to the PPC model.
- Yes, but with a small additional needed element. For example, suppose you can produce either 20 paper airplanes in a day *or* 40 drawings of puppie...
- Answer by example - In the example of rabbits and berries, you have to allocate a scarce resource, namely time, in order to acquire other resources...
- The number itself will be the same in either case. What changes is the sign of the equation (in this case negative). This should make sense because...
- Marginal Cost is simply the opportunity cost of 1 more unit while opportunity cost is not restricted to just one unit
- *Inside the PPC*: Inefficient, missing out on potential production of both goods. *On the PPC*: Efficient, maximizing production of both goods. *Ou...
- Hmmm… other things about a Constant Opportunity Cost of a Production Possibilities Frontier, PPF, or Curve PPC… So I believe you already understand...
Opportunity Cost, from the Concise Encyclopedia of Economics. When economists refer to the “opportunity cost” of a resource, they mean the value of the next-highest-valued alternative use of that resource. If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you can’t spend the ...
v. t. e. In microeconomic theory, the opportunity cost of a choice is the value of the best alternative forgone where, given limited resources, a choice needs to be made between several mutually exclusive alternatives.
May 15, 2024 · Learn the economic definition and examples of opportunity cost, the value of the next best alternative forgone in a choice. Find out how economists use this concept to compare the relative monetary values of goods and services.
