Define the term opportunity cost.
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Define the term opportunity cost.
Opportunity cost is the loss of the next best alternative when making a decision.
What does the term scarcity mean?
Scarcity is the situation where resources are finite in relation to the unlimited wants and needs of humans.
What is resource allocation?
Resource allocation is the decision-making process of assigning scarce resources to their most efficient use.
True or False?
Opportunity cost is a monetary amount.
False.
Opportunity cost is not a monetary amount, it is the loss of the next best alternative.
Define the term consumer.
A consumer is an individual or household that uses or consumes goods and services.
What does the term producer mean?
A producer is a business or individual who creates or supplies goods and services.
Define the term government.
A government is the system or group of people running an organised community, often a country.
What is a firm?
A firm is a business organisation that produces or supplies goods or services.
Define the term worker.
A worker is a person who offers their labour in return for a wage or salary.
What does the term factors of production mean?
Factors of production are the scarce resources used in the production of goods and services.
True or False?
Opportunity cost is about the gain of the next best alternative.
False.
Opportunity cost is the loss of the next best alternative when making a decision.
True or False?
A consideration of the opportunity cost often results in a different allocation of resources.
True.
A consideration of the opportunity cost often results in a different allocation of resources.