Briefly explain the concept of opportunity cost. What is the opportunity cost of attending college?
What will be an ideal response?
The opportunity cost of an action is the value of the next best alternative that a person has to give up when making a choice. The opportunity cost of attending college is what the college student would give up by going to school, such as the income she could have earned if she did not go to school.
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An efficient distribution of goods requires that
a. everyone gets an equal share of each good. b. marginal cost equal marginal utility for the last unit produced. c. each person derives the same total utility from the good. d. since tastes differ, every person pays a different price in accordance with different marginal utilities.
An underlying assumption of economic analysis is that people engage in rational decision making and ______.
a. self-promotion b. bargain hunting c. marginal thinking d. economic growth
SNAP provides:
A. financial assistance to needy families with children under age 19. B. assistance to poor people when emergencies arise that aren't taken care of by any of the other programs. C. nutritional assistance, often in the form of coupons redeemable at food stores. D. medical assistance for the poor, paid for by the individual states.
A temporary decrease in the price of oil would be considered a:
A. long-run supply shock. B. demand shock. C. short-run supply shock. D. The changing price of oil would not affect any of these.