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☆☆☆☆☆Failure to understand the basic definitions is perhaps the most frequent cause of difficulty or failure when studying economics.
The cost of an alternative that must be forgone in order to pursue a certain action. Opportunity cost is the cost of any activity measured in terms of the value of the next best alternative forgone (that is not chosen). It is the sacrifice related to the second best choice available to someone. Opportunity cost is a key concept in economics, and has been described as expressing "the basic relationship between scarcity and choice". The notion of opportunity cost plays a crucial part in ensuring that scarce resources are used efficiently.
when will a cost benefit analysis be done
considering whether companies or the government should make the goods.
People try to fulfill both with limited resources.
People have unlimited wants and limited resources to fulfill them.
A foreign country begins exporting the product in high volume.
An industrial assembly line
People make economic choices about what to do with their
resources.
A store that buys a shipment of computers can't afford to buy any new phones
