Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Opportunity cost is the value of the best alternative forgone when making a choice.
B
Understanding opportunity costs can help countries determine their absolute advantage in production.
C
Opportunity costs are irrelevant in resource allocation decisions since all options have equal value.
D
Countries specializing based on comparative advantage can trade more effectively and improve overall welfare.
E
Opportunity costs only apply to financial decisions and not to choices involving time or resources.
Understanding the Answer
Let's break down why this is correct
Answer
Opportunity cost is the value of what you give up when you make a choice. For example, if you decide to spend an hour studying instead of going out with friends, the opportunity cost is the fun and social time you miss. Understanding opportunity costs helps you make better decisions because it encourages you to think about the benefits of different choices. When you know what you are sacrificing, you can weigh your options more carefully and choose what is most important to you. This way, you can make decisions that align with your goals and values.
Detailed Explanation
Other options are incorrect because This statement is incorrect; This is a misunderstanding.
Key Concepts
Opportunity Costs
Comparative Advantage
Resource Allocation
Topic
Understanding Opportunity Costs
Difficulty
easy level question
Cognitive Level
understand
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