Finance Week 4 P1 Explore opportunity cost

What does opportunity cost refer to?

• The monetary cost of an item.

• The value a person could have received but passed up in pursuit of another option.

• The total cost of all available options.

• The time spent waiting in line for a free item.

What is Bob's opportunity cost for producing one banana?

• 10 fish

• 1 fish

• 10 bananas

• 3 fish

What is Ann's opportunity cost for producing one banana?

• 1 fish

• 10 bananas

• 3 fish

• 30 fish

What is the primary benefit of specialization and trade for individuals like Ann and Bob?

• It allows them to avoid all costs.

• It ensures they produce only one type of good.

• It leads to a better overall position than trying to do everything themselves.

• It eliminates the need for time management.