Question 2
Basic ConceptsEconomists speak about 'opportunity cost' when a person
- A.has the opportunity to attain a high degree of cost minimization
- B.has to forego one thing in order to have another
- C.can equate his fixed costs with his variable costs
- D.is able to run his business without much expenditure
- E.has to maximize utility in order to maintain a high standard of living.
Show the answer and explanation
Answer: B (has to forego one thing in order to have another)
Explanation
Opportunity cost is the alternative given up when a choice is made, so it arises whenever a person must forgo one thing to have another.