How are Trade-offs and opportunity costs different?

Social Studies

2 answers:

kondor19780726 [428]4 years ago

8 0

Trade-offs create opportunity costs. The thing you don't choose when you make a trade-off is your opportunity cost

Natasha_Volkova [10]4 years ago

8 0

The opportunity cost or alternative cost designates the cost of investing the available resources at the expense of the best alternative investment available, or also the value of the best option not made. The opportunity cost of an investment is the value discarded due to the realization of the same or also the cost of not realizing the investment. It is measured by the expected profitability of the funds invested in the project (or the allocation of the immobilization to other utilities, for example, the rent of a land that we have at our disposal or, for example, the dedication of these funds to the purchase of guaranteed public debt, yield and collection). This criterion is one of those used in investment elections. In principle, the return is at least equal to the opportunity cost.

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