Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The money spent on the vacation
B
The potential returns from the stocks you could have invested in
C
The joy of the vacation
D
The cost of living during the vacation
Understanding the Answer
Let's break down why this is correct
Answer
Opportunity cost is what you give up when you make a choice. If you decide to spend your savings on a vacation instead of investing in stocks, the opportunity cost is the potential money you could have earned from that investment. For example, if you invest your savings in stocks and they grow by 10% in a year, that’s the profit you miss out on by going on vacation. So, while the vacation might give you fun experiences, you also lose the chance to grow your savings. Understanding opportunity cost helps you make better choices about how to use your money.
Detailed Explanation
The opportunity cost is what you give up when you make a choice. Other options are incorrect because Some might think the vacation cost is the main loss; While the joy of the vacation is real, it is not the opportunity cost.
Key Concepts
trade-offs
Topic
Analyzing Opportunity Costs
Difficulty
easy level question
Cognitive Level
understand
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