Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Introduction

Question:

Which of the following options can be related to opportunity cost?

Options:

Actual cost

Explicit cost

Economic cost

Total cost

Correct Answer:

Economic cost

Explanation:

The option that can be related to opportunity cost is: Economic cost

Explanation:

  • Opportunity cost refers to the value of the next best alternative foregone when a decision is made.
  • Economic cost includes both explicit costs (actual monetary payments made for resources) and implicit costs (opportunity costs associated with using resources that the firm already owns).
  • Therefore, economic cost encompasses the concept of opportunity cost, as it considers the value of the resources in their best alternative uses.