Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
opportunity cost
B
sunk cost
C
marginal cost
D
implicit cost
Understanding the Answer
Let's break down why this is correct
Answer
When making economic decisions, the term you are looking for is "opportunity cost. " This concept refers to the value of the next best alternative that you give up when you choose one option over another. For example, if you decide to spend your Saturday working at a part-time job instead of going to a concert, the opportunity cost is the enjoyment and experience you miss out on at the concert. Understanding opportunity cost helps people make better choices by considering what they are sacrificing when they make a decision. By weighing these alternatives, you can choose the option that gives you the most benefit.
Detailed Explanation
Opportunity cost is what you give up when you choose one option over another. Other options are incorrect because Sunk cost is money already spent that cannot be recovered; Marginal cost is the cost of producing one more unit.
Key Concepts
Opportunity Cost
Trade-offs
Resource Allocation
Topic
Opportunity Cost Analysis
Difficulty
easy level question
Cognitive Level
understand
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