AP Microeconomics

Category - Microeconomics

Every choice that an individual makes results in a foregone best alternative choice. What do economists call this?
  1. Cost of switching
  2. Opportunity cost
  3. Externality
  4. Prisoner’s dilemma
Explanation
Answer - B - Every choice than an individual makes results in a foregone best alternative choice. Economists call this opportunity cost.

Key Takeaway: Opportunity cost refers to the concrete value of what you are giving up in the trade off (often in terms of time or money). Remember not to confuse this with “trade-off,” which is the correct term for the simple act of giving one thing up for another.
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