Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Consumers ignore opportunity costs when choosing products.
B
Consumers choose products based solely on their market price.
C
Consumers consider the value of the next best alternative when making purchases.
D
Consumers are not influenced by trade-offs in their economic decisions.
Understanding the Answer
Let's break down why this is correct
Answer
In welfare economics, opportunity cost is the value of what you give up when you choose one option over another. When consumers make purchasing decisions, they consider not only the price of the item but also what else they could have bought with that money. For example, if you spend $20 on a new shirt, the opportunity cost might be the movie ticket you can't buy because you used that money for the shirt instead. This concept helps consumers think about the trade-offs involved in their choices, encouraging them to consider what they truly value most. Ultimately, understanding opportunity cost helps people make better decisions that align with their preferences and needs.
Detailed Explanation
Consumers think about what they give up when they buy something. Other options are incorrect because Some people might think that consumers don't think about what they give up; It's a common mistake to believe that price is the only factor.
Key Concepts
opportunity cost
consumer choice
welfare economics
Topic
Trade-offs in Economics
Difficulty
hard level question
Cognitive Level
understand
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