📚 Learning Guide
Resource Allocation and Scarcity
easy

What is the opportunity cost of choosing to spend your savings on a new car instead of investing in your education?

Master this concept with our detailed explanation and step-by-step learning approach

Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose the Best Answer

A

The value of the car you purchased

B

The potential income you could have earned from better job opportunities due to education

C

The money spent on the car

D

The time spent researching car options

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 new car instead of investing in your education, the opportunity cost is the benefits you could have gained from that education. For example, by investing in education, you might gain new skills that lead to a better job and higher income in the future. This means that while the car gives you immediate transportation, the education could provide long-term financial stability and personal growth. Understanding opportunity cost helps you make better choices about how to use your resources wisely.

Detailed Explanation

The opportunity cost is what you give up when you make a choice. Other options are incorrect because Some might think the car's value is the cost; People may confuse the money spent as the cost.

Key Concepts

opportunity cost
Topic

Resource Allocation and Scarcity

Difficulty

easy level question

Cognitive Level

understand

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