CUET Preparation Today
In the question given below there are 2 statements marked as Assertion (A) and Reason (R). Choose the correct alternative from the following options. Assertion (A)- Raju has Rs. 3,00,000 with him, he has 2 choices i.e. to open an F.D. and get a return of 6% whereas, the other choice was to invest in his business which may or may not give him return. According to Raju, if he invests in his business his opportunity cost would be the interest he could have earned if he had invested the money in the form of FD. Reason (R)- Opportunity cost means the value which you gain by choosing the best alternative out of the available possibilities. |
Both (A) and (R) are true and (R) is the correct explanation. Both (A) and (R) are true but (R) is not the correct explanation of (A). (A) Is true but (R) is false. (A) Is false but (R) is true. |
(A) Is true but (R) is false. |
The correct answer is Option 3: (A) Is true but (R) is false. Assertion (A): "Raju has Rs. 3,00,000 with him, he has 2 choices i.e. to open an F.D. and get a return of 6% whereas, the other choice was to invest in his business which may or may not give him return. According to Raju, if he invests in his business his opportunity cost would be the interest he could have earned if he had invested the money in the form of FD." This statement is true. Opportunity cost is indeed the benefit that is forgone from not choosing the next best alternative. In Raju's case, the opportunity cost of investing in his business is the interest he would have earned from the Fixed Deposit (FD). Reason (R): "Opportunity cost means the value which you gain by choosing the best alternative out of the available possibilities."This statement is false. Opportunity cost actually refers to the value of the next best alternative that is foregone when making a decision, not the value gained. It’s about what you give up, not what you gain. |
