Concept explainers
Relevance of
Explanation of Solution
Option (a): The opportunity cost of going home is, lost the time that can be used for other purpose like studying.
Option (b): Opportunity cost of riding bicycle 20 miles every day is, alternative use of that time.
Option (c): Opportunity cost of Federal government is, value of other goods and services that the government can buy with that tax revenue.
Option (d): The opportunity cost of foreign government is, value of other goods and services that the government can buy with the subsidy amount.
Option (e): Opportunity cost of upgrading balcony is, alternative use of that money.
Opportunity cost: Opportunity cost is the best alternative costs that forgo, or give up, when a decision or choice has to be taken.
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Chapter 2 Solutions
Principles of Macroeconomics
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