Macroeconomics: Principles, Problems, & Policies 20th Edition

Published by McGraw-Hill Education
ISBN 10: 0-07766-077-3
ISBN 13: 978-0-07766-077-2

Chapter 1 - Limits, Alternatives and Choices - Discussion Questions: 1

Answer

Opportunity cost refers to the cost forgone when an individual makes a choice between two or more things. This relates to the definition of economics through the notion of scarcity - that an individual has unlimited wants but finite resources.

Work Step by Step

Allocating a square block in a typical suburb would incur a greater opportunity cost, due to the revenue foregone that would have been available from the greater quantity of cars in New York City.
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