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)- Opportunity cost is also referred as the opportunity a person has lost.
Reason (R)- Opportunity cost is the value of next best alternative, which is sacrificed while making a decision.
Answer & explanation
Correct answer: option 1
The correct option is: ☀ Both (A) and (R) are true but (R) is the correct explanation of (A).
Here's why:
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Assertion (A): Opportunity cost is also referred to as the opportunity a person has lost. This statement is true. When you make a decision, you forgo the benefits of other options. In essence, you lose the opportunity to pursue those alternatives.
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Reason (R): Opportunity cost is the value of the next best alternative, which is sacrificed while making a decision. This statement is also true. This is the precise definition of opportunity cost. The Reason provides the correct explanation for why opportunity cost is referred to as the opportunity a person has lost.