Opportunity costs exist because:A) the decision to engage in one activity means forgoing some other activity.B) wants are scarce relative to resources.C) households and businesses make rational decisions.D) most decisions do not involve sacrifices or trade-offs.

Question

Opportunity costs exist because:A)  the decision to engage in one activity means forgoing some other activity.B)  wants are scarce relative to resources.C)  households and businesses make rational decisions.D)  most decisions do not involve sacrifices or trade-offs.

Siddhartha Mittal · Accepted Answer

Final Answer : A, Explanation :  Opportunity costs exist because when we choose to engage in one activity, we have to forgo some other activity. Therefore, the best choice is A, which correctly explains the concept of opportunity costs. B is incorrect because wants being scarce relative to resources explains the concept of scarcity, not opportunity costs. C is incorrect because households and businesses making rational decisions does not necessarily have anything to do with opportunity costs. D is incorrect because most decisions do involve sacrifices or trade-offs, so this statement is false.

Opportunity costs exist because:

A) the decision to engage in one activity means forgoing some other activity.
B) wants are scarce relative to resources.
C) households and businesses make rational decisions.
D) most decisions do not involve sacrifices or trade-offs.

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Learning Objectives

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