Question

Page 13 1.2. What are five foundations of economics? Caroline has several options for how to spend her Saturday night, listed in order of descending preference: Go to a folk music concert with a friend. Get dinner with several of her sorority sisters. Go shopping with her mom. Caroline can only do one activity. Match each activity (on the left) with its opportunity cost (on the right).

Answer 1

Answer:

Economic theory' five pillars are opportunities, trade-offs, the expense of opportunity, marginal valuation as well as the theory of value-creating exchange.

In simple words, opportunity cost refers to the cost of losing profits by choosing one alternative over the other. Thus, if Caroline choose to got to music concert, her opportunity cost would be the loss of privilege to be at shopping or dinner. Same applies to other two options.