Questions tagged [opportunity-cost]

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What is value in(opportunity cost)?

Opportunity cost is defined as the value of the next best alternative forgone. What do we mean by value? I think I’d best understand with an example: Suppose I have two only options buying a mobile ...
Vivaan Daga's user avatar
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Do monopolistic firms indirectly increase prices of products sold by perfectly competitive firms?

Correct me if I'm wrong, but this is my understanding: In perfect competition, firms set the price at the marginal cost of production. This gives them a relatively low amount of profit. In ...
causative's user avatar
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Opportunity Cost Comparisons

Suppose we have 1 firm and the firm has three options: (1) Produce and get \$100 in revenue - \$200 in costs = -\$100 in profit. (2) Temporarily shut down and pay fixed costs = -\$50 in profit. (3) ...
K Carroll's user avatar
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Opportunity cost on PPC

Hi, I'm trying to learn opportunity cost and this is an image I took from Khanacadmeny. They said that due to the bowed out shape, it means that there is an increasing opportunity costs of production. ...
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What Interest Rate used to calculate opportunity cost?

What Interest Rate used to calculate opportunity cost (Calculating Future Value/Present Value)? Usually in the textbook it said that the rate used is government bonds interest rate(since it's risk ...
Fahrul's user avatar
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Opportunity cost of goods provided free of cost

If the government of a country decides to provide certain good free of cost to its citizens, what can one say about the opportunity cost? Government is certainly using the revenues raised from the ...
HARVEER RAWAT's user avatar
1 vote
1 answer
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How has decreasing quality (or the need to pay more for the same quality) tracked with inflation?

I'm trying to identity a missing variable that could affect poor and middle class consumers more than more wealthy/resourceful individuals. Assuming that there are decisions regarding cost reductions ...
makerofthings7's user avatar
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Question on an argument in "The Myth of Absolute Advantage"

Brandis (1967) argues that "absolute advantage does not exist" and "that it is a logical impossibility". (See also comment, comment, reply.) My question here is very narrow and specific. I do not ...
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Purchase price equals present value of future price

Suppose we need to decide if to acquire A now for \$95.24 or in one year for $100. If the opportunity cost is 5% annual, what option would you choose? My possible solution: as the present value of \$...
monalisa's user avatar
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Microeconomics-opportunity cost and trade

Question: In Islandia, a small economy, Jack and Jill shall make their production and consumption decisions together. Jack can produce either 10 kg of banana or 14 kg of tea per day. Jill can ...
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1 answer
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Trade and Opportunity Cost

This is a question on opportunity cost. I had problem in solving the last part. Please help me out.
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A question of measuring the opportunity cost

I have a question about opportunity cost (from Microeconomics- Case Studies and Applications -3rd Edition by Jeff Borland) ...
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