Answer:
What’s opportunity cost? Provide a hypothetical situation/scenario showing an understanding of this concept.
Step-by-step explanation:
Opportunity cost is the value of the next best alternative that must be foregone in order to pursue a certain action. In simpler terms, it is the cost of choosing one option over the other.
For example, suppose a person has $100 to spend and they are trying to decide between buying a new video game for $50 or going out to a fancy restaurant for $50. If the person decides to buy the video game, the opportunity cost would be the cost of not going out to the restaurant, which is the value of the satisfaction or enjoyment that they would have received from the restaurant. Similarly, if the person decides to go out to the restaurant, the opportunity cost would be the cost of not buying the video game.
Another example could be a student deciding whether to work a part-time job or spend time studying. If the student decides to work, the opportunity cost would be the time that they could have spent studying, which could result in lower grades or reduced learning. On the other hand, if the student decides to study, the opportunity cost would be the money that they could have earned from the part-time job.