Question

Please give different answer, thank you.

1) What is your opportunity cost of taking Principle of Economics? How does the role of scarcity influence decisions that you have to make?

2) Assume that you were a small country, what would you rather have a comparative or absolute advantage with trading? Explain your reasoning.

Answer 1

ANSWER-1) Opportunity cost is the loss of potential benefits from choosing one option from a number of alternate options. For every choice a person makes, there is potential gain which he lost out on by choosing that option. For example: I needed a beverage, however have money only for one can of drink, thus have to choose among coca cola or pepsi. I wanted both but due to the scarce resources i.e. money I have to make a choice. I choose coke over Pepsi, thus here the can of pepsi becomes your opportunity cost