Question: Which Of The Following Is The Best Definition Of Opportunity Cost Of A Decision?

Which best defines utility quizlet?

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Total Utility is best defined as the.

total satisfaction received from consuming a product..

What is the law of opportunity cost?

The law of increasing opportunity cost is the concept that as you continue to increase production of one good, the opportunity cost of producing that next unit increases. This comes about as you reallocate resources to produce one good that was better suited to produce the original good.

What is opportunity cost and how does it affect decision making?

Every time you make a choice, you’re weighing the opportunity cost of that action. Opportunity costs extend beyond just the monetary costs of a decision, but it includes all real costs of making one choice over another, including the loss of time, energy and a derived pleasure/utility.

What is an example of opportunity cost?

When economists refer to the “opportunity cost” of a resource, they mean the value of the next-highest-valued alternative use of that resource. If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you can’t spend the money on something else.

What is the importance of opportunity cost?

Opportunity Cost helps a manufacturer to determine whether to produce or not. He can assess the economic benefit of going for a production activity by comparing it with the option of not producing at all. He may invest the same amount of money, time, and resources in another business or Opportunity.

What is opportunity cost in this scenario?

The opportunity cost in this scenario is the three lost opportunities Harry experiences by deciding to go to his parents house. The term opportunity cost refers to the loss of potential gain from other alternatives when one alternative is chosen.

What is the definition of opportunity?

1 : a favorable juncture of circumstances the halt provided an opportunity for rest and refreshment. 2 : a good chance for advancement or progress.

Which of the following is the correct definition of utility?

Utility is the measure of : the relative satisfaction, enjoyment, or contentment a person receives from consuming a good or service. The law of Diminishing Marginal Utility means that the more of a good that a person receives, the added utility from each additional unit ______________. decreases.

What’s the definition of opportunity cost?

Opportunity costs represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. … Understanding the potential missed opportunities foregone by choosing one investment over another allows for better decision-making.

Which of the following is the best definition for opportunity cost?

In microeconomic theory, opportunity cost, or alternative cost, is the loss of potential gain from other alternatives when one particular alternative is chosen over the others. In simple terms, opportunity cost is the loss of the benefit that could have been enjoyed had a given choice not been made.

What factors into opportunity cost for a decision?

Three Key Factors of Opportunity CostMoney. With financial considerations to weigh, the key question to ask before making an opportunity cost decision is what else would you do with the money you’re about to spend on a single decision? … Time. … Effort/Sweat equity.

What is the meaning of marginal utility?

Marginal utility is the added satisfaction that a consumer gets from having one more unit of a good or service. The concept of marginal utility is used by economists to determine how much of an item consumers are willing to purchase.

Which of the following is the best definition of marginal utility quizlet?

Which of the following is the best definition of marginal utility? The principle of diminishing marginal utility states that people’s total utility declines when increasing the number of units consumed.

Which of the following is the best definition of the opportunity cost of a decision quizlet?

Opportunity cost is defined as the value of the next best alternative.

What is an example of opportunity cost in your life?

A student spends three hours and $20 at the movies the night before an exam. The opportunity cost is time spent studying and that money to spend on something else. A farmer chooses to plant wheat; the opportunity cost is planting a different crop, or an alternate use of the resources (land and farm equipment).

What does per unit opportunity cost mean?

Opportunity Cost-shows what you’ve given up to make something else. Efficiency-if a point is within the curve, it demonstrates inefficiency/unemployment. Constant Opportunity Cost. Resources are easily adaptable for producing either good.