What is educational opportunity cost?
An opportunity cost is defined as the value of a forgone activity or alternative when another item or activity is chosen. … For example, to define the costs of a college education, a student would probably include such costs as tuition, housing, and books.
What are some examples of opportunity cost?
Examples of Opportunity Cost
- Someone gives up going to see a movie to study for a test in order to get a good grade. …
- At the ice cream parlor, you have to choose between rocky road and strawberry. …
- A player attends baseball training to be a better player instead of taking a vacation.
What is opportunity cost?
Opportunity costs represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. … Understanding the potential missed opportunities foregone by choosing one investment over another allows for better decision-making.
What is the opportunity cost of showing up to class?
The opportunity cost of attending one class is the sum of the explicit and implicit costs. Not only do students benefit from a practical application of an important economic concept, they also become more aware of the importance of attending class!
What is the benefit of opportunity cost?
The concept of Opportunity Cost helps us to choose the best possible option among all the available options. It helps us to use every possible resource tactfully, efficiently and hence, maximize economic profits.
What are the disadvantages of opportunity cost?
The disadvantages of opportunity cost are;
- Time: Opportunity costs take time to calculate and consider. …
- Lack of Accounting: Though useful in decision making, the biggest drawback of opportunity cost is that it is not accounted for by company accounts.
Which scenario is the best example of opportunity cost?
The correct answer is a. A computer company produces fewer laptops to meet tablet demand. Opportunity cost defines the benefit obtained by having a commodity after forgoing some other commodity. In the problem statement, the computer company incurs an opportunity cost of laptops for tablets.
What is the formula for opportunity cost?
You can determine the opportunity cost of choosing one investment option over another by using the following formula: Opportunity Cost = Return on Most Profitable Investment Choice – Return on Investment Chosen to Pursue.
What situation is the best example of opportunity cost?
It is the important concept in economics and also the relationship which is between choice and scarcity. A good example of opportunity cost is you can spend money and time on other things but you can not spend time reading books or the money in doing something which can help.
What is opportunity cost simple words?
Opportunity cost refers to what you have to give up to buy what you want in terms of other goods or services. When economists use the word “cost,” we usually mean opportunity cost.
What is opportunity cost kid definition?
Kids Encyclopedia Facts. Opportunity cost is the value of the next best thing you give up whenever you make a decision. It is “the loss of potential gain from other alternatives when one alternative is chosen”.
What is opportunity cost diagram?
The Production Possibilities Curve (PPC) is a model that captures scarcity and the opportunity costs of choices when faced with the possibility of producing two goods or services. Points on the interior of the PPC are inefficient, points on the PPC are efficient, and points beyond the PPC are unattainable.