B. the opportunity cost of producing 500 guns instead of 300 guns is zero since we don't have to give up any bread. Clyde Prestowitz, in his assigned reading, cites a study that measures various costs of US trade with China. D)substitution cost. How Opportunity Cost Works . Study Questions (with Answers) Page 5 of 7 (9) 11. Try this amazing Chapter 1 Section 2 Quiz (Opportunity Cost) quiz which has been attempted 2232 times by avid quiz takers. She wants to attend college for a semester (about 3 months). question: Jolie's currently working full time. If you do, you wont be able to take the usual summer job that pays $8000 for the summer and you wont be able to live at home for free. Concepts: Opportunity Cost Scarcity Capital Goods Choice Consumer Goods Communism Content Standards and Benchmarks (1, 3 and 15): Standard 1: Productive resources are limited. a. The cost of tuition is $2000, textbooks $300 and living expenses are $1300. Julie can wash 10 dishes OR 2 loads of laundry per hour. (1 per student) Handout: Practice with opportunity cost analysis (1 per student) Overhead transparencies or power points slides: Visual 1: Characteristics of Cost. 30 seconds . 0.50 swimming pool. Simply put, the opportunity cost is what you must forgo in order to get something. ... What graphically shows the opportunity cost of producing one more unit of one good in terms of the amount of the other good that must be given up? c) Costs avoided by making a… What would be Stewart's opportunity cost of attending college? Opportunity Cost Calculation in Excel. A)the question "what." Microeconomics Topic 1: “Explain the concept of opportunity cost and explain why accounting profits and economic profits are not the same.” Reference: Gregory Mankiw’s Principles of Microeconomics, 2nd edition, Chapter 1 (p. 3-6) and Chapter 13 (p. 270-2). Let us now do the same Opportunity Cost example in Excel. This involves the cost incurred for transportation, installation, and acquisition. C. the income which could have been earned by a college student had he or she worked full time instead of attending college. Opportunity And Marginal Costs. Solution for Opportunity costs represent: Question options: a) Costs avoided by making a particular decision. Opportunity costs are truly everywhere, and they occur with every decision we make, whether it’s big or small. C. the opportunity cost of producing 400 guns instead of 100 guns is 600 units of bread. SURVEY . Investors try to consider the potential opportunity cost while making choices, but the calculation of opportunity cost is much more accurate with the benefit of hindsight. Question 1 . Question: Some Costs Associated With Anticipated Inflation Are 1 Point Transaction And Settlement Costs. Question 18: An optimal assignment requires that the maximum number of lines which can be drawn through squares with zero opportunity cost be equal to the number of _____. Cost concept demands all assets to be recorded in the books of accounts at the price at which they were bought. After you have finished the quiz, click on the Grade my Quiz button at the bottom of the page. Opportunity cost is the potential loss owed to a missed opportunity, often because somebody chooses A over B, the possible benefit from B is foregone in favor of A. Gareth can wash 30 dishes OR 3 loads of laundry per hour. Frequently Asked Questions - opportunity cost. FAQs - opportunity cost Define the concept of opportunity cost. The answer is that the price will fall somewhere between my oportunity cost and your opportunity cost. If he worked, he could make $30,000 annually and would live in a less expensive area where the average monthly rent would be $500. Visual 2: Discussion Questions: Choosing a Snack What is the Opportunity Cost of a Decision? B)money C)giving up something for nothing. The cost concept is a traditional method concerning the asset is paid on … A. the opportunity cost of producing 200 guns instead of 100 guns is 750 units of bread. Tuition, texts and fees cost $2 000, reduced work hours lowers her income from $12 000 to $3 000. Also explore over 4 similar quizzes in this category. what is the opportunity cost … Question: Discuss The Benefits And Opportunity Costs Of Government Farm Subsidies. Opportunity cost is one of the key concepts in the study of economics Economics CFI's Economics Articles are designed as self-study guides to learn economics at your own pace. If market research indicates that the company can raise consumer awareness by changing the design of their package – and the company chooses NOT to go ahead with the research – the opportunity cost is the difference in sales between what they earned and what they could have earned. Based on the data provided in the graph, what is the opportunity cost of building one swimming pool? The opportunity cost of the new design of the product will be the increased cost and its inability to compete on price. Materials. The answer must include the following concept explanation ... this leads to choices being made and opportunity cost when a choice is; Quiz on the PPC, Opportunity Cost, and the Gains from Trade. The opportunity cost of the same project may be the cost to redesign (or not redesign) the packaging. Practice with Opportunity Cost Analysis. A B c D Reduced specialisation of labour (You may use the last column in answering the question.) 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