Question

What is the basic premise of an opportunity cost? Question 1 options: When you buy something, you are foregoing all the other things you could have bought instead. People are more likely to spend their money when there are many opportunities to do so. When the demand for a product or service increases, the cost of that product or service also increases. A form of currency is needed to allow people in unrelated businesses to exchange services.

Answer 1

Answer:

When you buy something, you are foregoing all the other things you could have bought instead.  

Explanation:

Opportunity cost is an economic concept that refers to the cost of giving up certain factors as a result of choosing a specific factor. In a simpler way, we can say that this concept refers to a situation, where an individual must choose a factor for a certain objective to be achieved, but the choice of that factor forces the individual to give up other factors.

An example of this can be seen when a person has to choose between buying a new sofa and running out of money to change the garage floor, or changing the garage floor, but running out of money to buy the new sofa.