Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The cost of the best alternative foregone.
B
The total cost incurred in production.
C
The cost associated with labor only.
D
The fixed cost that does not change with output.
Understanding the Answer
Let's break down why this is correct
Answer
Opportunity cost is an important concept in economics that helps us understand the choices we make. It refers to what we give up when we choose one option over another. In marginal analysis, we look at the additional benefits of a decision compared to the additional costs. For example, if you decide to spend an hour studying instead of playing video games, the opportunity cost is the enjoyment and relaxation you miss out on during that hour. By considering opportunity costs, we can make better decisions that maximize our benefits and minimize our losses.
Detailed Explanation
Opportunity cost means what you give up when you choose one option over another. Other options are incorrect because This answer confuses total costs with opportunity cost; This option limits costs to labor only.
Key Concepts
opportunity cost
Topic
Understanding Marginal Analysis
Difficulty
easy level question
Cognitive Level
understand
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