Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Introduction

Question:

Which of the following option indicates the value of a factor in its next best alternative use?

Options:

Marginal cost

Production possibility frontier

Societal cost

Opportunity cost

Correct Answer:

Opportunity cost

Explanation:

Opportunity cost refers to the value of next-best alternative when a decision is made, it's what is given up. It is also called as alternative cost, the loss of gain which could have been gained if another alternative was chosen. We can explain it as the loss of benefit we have to face due to a change in choice.