Question

Opportunity costs exist because: a. the decision to engage in one activity means forgoing some other activity. b. wants are scarce relative to resources. c. households and businesses make rational decisions. d. most decisions do not involve sacrifices or trade-offs.

Answer 1

Answer:

a. the decision to engage in one activity means forgoing some other activity.

Explanation:

Opportunity cost is the cost incurred when an economic agent forgoes some other activities to engage in one activity.

Economic agents have to make choices because wants are unlimited and resources are limited.

Opportunity cost is also known as economic cost.

An example of opportunity cost : Assume a doctor leaves his job where he earns $500,000 per annum to start his own business where his accounting profit is $700,000. His Opportunity cost is $500,000.

I hope my answer helps you.