Opportunity cost represents the benefits that a business could have gained by taking a different decision.
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Opportunity Cost: work-leisure choices
The opportunity cost of deciding not to work an extra ten hours a week is the lost wages given up
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Opportunity cost: government spending priorities
The opportunity cost of the government spending an extra £10 on investment in NHS might be that £10 billion less available for spending on education or defense equipment.
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Opportunity cost: use of scare farming land
The opportunity cost of using farmland to grow wheat for bio-fuel means that there is less wheat available for food production, causing food prices to rise
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Trade-offs
A trade-off arises where having more of one thing potentially results in having less of another.
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Other cards in this set
Card 2
Front
Opportunity Cost: work-leisure choices
Back
The opportunity cost of deciding not to work an extra ten hours a week is the lost wages given up
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