What is an opportunity cost? Give an example
What will be an ideal response?
An opportunity cost of something is the best thing you must give up to get it. For example, the cost of attending class might be the extra hour of sleep you lose, or the opportunity cost of buying a taco might be the soda you can no longer buy.
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If the price is $5 and the quantity demanded is 100 units, then at a price of $10, the quantity demanded will be
A) less than or equal to 100 units. B) greater than or equal to 100 units. C) less than or equal to 1000 units. D) equal to 100 units.
If a production process involved the creation of a negative externality, then the social cost of production would be:
A. zero. B. smaller than the private cost of production. C. larger than the private cost of production. D. the same as the private cost of production.