Question : The opportunity cost of a factor of production is
Option 1: What it is earning in its present use .
Option 2: What it can earn in the long period .
Option 3: What has to be paid to retain it in its present use .
Option 4: What it can earn in some other use.
Correct Answer: What it can earn in some other use.
Solution : The correct option is What it can earn in some other use.
Opportunity cost is the benefit or profit that could have been gained if a resource was used in its next best alternative way. For instance, if a skilled worker chooses to work in a car factory, the opportunity cost is the potential higher wages they could have earned in a well-paying tech company.
Answer Key | Eligibility | Application | Selection Process | Preparation Tips | Result | Admit Card
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile