The opportunity cost of any action is: a. the time required but not the monetary cost. D)requires no actual payment of cash. Marginal Cost is how much it This cost is called the of the So Simply put, the opportunity cost is what you must forgo in order to get something. The opportunity cost of a given action is equal to the value foregone of all feasible alternative actions. The opportunity cost of a given action is equal to the value foregone of all feasible alternative actions. Fill in the type of cost that best completes each sentence: a. In microeconomic theory, opportunity cost, or alternative cost, is the loss of potential gain from other alternatives when one particular alternative is chosen over the others. In micro-economic theory, the opportunity cost, also known as alternative cost, is the value (not a benefit) of the choice of a best alternative cost while making a decision. Opportunity cost is the value of something when a particular course of action is chosen. b. all The opportunity cost of an action is (A) the monetary payment the action required. To calculate accurately the opportunity cost of an action we need to first identify the next best alternative to that action. Opportunity cost is often used by investors to compare investments, but the concept can be applied to many different scenarios. (B) the total time spent by all parties in carrying out the action. The opportunity cost of spending $19 to download songs from an online music provider is measured by the benefit that you would have received had you used the$19 instead for another purpose. In simple terms, opportunity cost is the loss of the benefit that could have been enjoyed had a given choice not been made. The opportunity cost is the value of the best forgone alternative. To choose the action you prefer, you must accept the "cost" of losing the C)is adjusted for the rate of inflation. Accounting cost are your actual costs that an accountant would recognize. And the answer is no, they are not the same thing! b.Requires a current outlay of cash. This definition emphasizes that the cost of an action includes the monetary cost as well as the value forgone by taking the action. Read ahead to know how you can use these two values to arrive at the opportunity cost figure. The opportunity cost of a given action is equal to the value foregone of all feasible alternative actions. It is the sacrifice related to the se view the full answer the things Opportunity cost is a key concept in economics, and has Basically, opportunity cost is the value of an alternative course of action given the choice to do something else. “The value of a benefit sacrificed in favour of an alternative course of action” is a. Sunk cost b. For example, the opportunity cost of the burger is the cost of the burger divided by the cost of the bus ticket, or $\frac{2.00}{0.50}=4$ The opportunity cost of a bus ticket is: Opportunity cost. Opportunity cost c. Imputed cost d. Notional cost 42. Opportunity cost is the cost of making one decision over another – that can come in the form of time, money, effort, or ‘utility’ (enjoyment or satisfaction). The opportunity cost formula is a simple solution to answer the age old question of whether a particular course of action is worth starting. 2. the best alternative for the resources to undertake the action. When you make an investment decision, there is often a next best alternative that you decided not to take, such as buying one stock and passing up the opportunity to buy a different one. III. Using the opportunity cost approach can help merchants weigh the pros and cons of 1. THE CONCEPT OF OPPORTUNITY COST The total cost of any choice we make—buying a car, producing a computer, or even reading a book—is everything we must give upwhen we take that action. Opportunity costs only measure direct out of pocket expenditures. The opportunity cost of any action is a irrelevant to economic theory b limited to the out-of-pocket cost incurred c the sunk cost plus the markup on materials and labor d what we gain in the process of consumption e Opportunity cost considers only the next best alternative to an action, not the entire set of alternatives, and takes into account all of the differences between the … We make these decisions every day in our lives without even thinking. B) the implicit cost of giving up taking the best alternative action. B)is measured by the amount of cash the firm actually pays out. 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