📚 Learning Guide
Calculating Opportunity Costs
easy

If Robert decides to produce more coconuts, what is the opportunity cost of this decision?

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Learning Path
Learning Path

Question & Answer
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Choose the Best Answer

A

The value of the palm leaves he could have made instead

B

The total number of coconuts he has

C

The resources used for making coconuts

D

The price of coconuts in the market

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 Robert decides to produce more coconuts, the opportunity cost would be the other things he could have produced instead, like pineapples or bananas. For example, if he can produce either 10 coconuts or 5 pineapples in a day, choosing to make more coconuts means he is giving up the chance to make those 5 pineapples. This shows that opportunity cost helps us understand the trade-offs we face when making decisions. So, by focusing on coconuts, Robert will miss out on the benefits of producing other fruits.

Detailed Explanation

Opportunity cost is what you give up when you make a choice. Other options are incorrect because Some might think the total number of coconuts is the cost; This option suggests that the resources themselves are the cost.

Key Concepts

Opportunity Cost
Comparative Advantage
Resource Allocation
Topic

Calculating Opportunity Costs

Difficulty

easy level question

Cognitive Level

understand

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