Opportunity cost and Scarcity



Opportunity cost and scarcity

I mentioned to you guys earlier that limited resources and unlimited wanted leads to scarcity and scarcity forces a person to choose between two different options which is opportunity cost.

For instance, if you had $10 and you could choose between an ice-cream and toy and you chose ice-cream, the opportunity cost of buying an ice-cream is a toy. Opportunity cost would never be in money value. Opportunity cost is the best alternate forgone while making a choice.

Money: $10
Options: Ice-cream or Toy
Opportunity cost of ice-cream is toy
Opportunity cost of toy is ice-cream
You can never say that the opportunity cost of ice-cream is toy
You can never say that the opportunity cost of toy is ice-cream






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