Question

Define opportunity cost. What is the opportunity cost to you of attending college? What was your opportunity cost of doing this test today?

6. If there is a new breakthrough in manufacturing technology that reduces the cost of producing cell phones by half, what will happen the following four parts of supply and demand:

• supply of cellphones

• demand for cellphones

• price and sale (quantity sold) of cellphones

• demand for cellphones apps

For full credit, explain in detail what happens in both the market for cellphones and cellphone apps using terms such as "shifts in demand left or right" or "supply shifts".

Answer 1

Q1. Opportunity cost is defined as the cost associated with loss of alternative when an option is chosen out of other mutually exclusive events. When one opt an option from many available option, one has to bear the opportunity cost of letting off other oprions.

Opportunity cost of attending college can be doing a job, engagging in any sports or other activity like dance, music. This may also include investment of money which would have been paid out as college fees. Opportunity cost of today's test is engaging in other activities like reading, playing a sports or simply lesiure.