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Exam Preparation Strategies
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Emily has a limited budget for her weekly grocery shopping. She needs to choose between buying more fruits or more snacks. If she decides to buy fruits, she will have to forgo some snacks. How does this situation illustrate the concept of opportunity cost in economic decision-making?

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Learning Path
Learning Path

Question & Answer
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Choose the Best Answer

A

Emily's decision reflects her marginal benefit of purchasing fruits over snacks, as she prioritizes health.

B

The opportunity cost is the value of the fruits she could have bought instead of snacks.

C

The opportunity cost is the snacks she has to give up to buy more fruits.

D

Opportunity cost does not apply here because Emily can buy both fruits and snacks on sale.

Understanding the Answer

Let's break down why this is correct

Answer

Emily's situation shows the idea of opportunity cost, which is what she gives up when making a choice. If she decides to spend her budget on fruits, she will not have enough money left to buy as many snacks as she wants. This means the snacks she didn’t buy are the opportunity cost of choosing fruits. For example, if she could buy five apples for $5 or three bags of chips for the same amount, choosing apples means she gives up the enjoyment of those chips. Understanding opportunity cost helps Emily make better choices by considering what she values more at that moment.

Detailed Explanation

The opportunity cost is what you give up when you make a choice. Other options are incorrect because This answer confuses benefits with costs; This option misstates what opportunity cost is.

Key Concepts

Opportunity Cost
Scarcity
Marginal Benefits and Costs
Topic

Exam Preparation Strategies

Difficulty

easy level question

Cognitive Level

understand

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