Multiple Choice
A resource has value, and people are willing to pay for it most likely because the resource is:
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0. Basic Principles of Economics
Scarcity and Choice
Multiple Choice
When studying finance or economics, the cost of a decision is also known as a(n):
A
sunk cost
B
fixed cost
C
explicit cost
D
opportunity cost
Verified step by step guidance1
Understand the concept of 'cost' in economics: it refers to what you give up when making a decision.
Recognize that a 'sunk cost' is a past cost that cannot be recovered and should not affect current decisions.
Know that a 'fixed cost' is a cost that does not change with the level of output or decision in the short run.
Identify that an 'explicit cost' involves direct monetary payment for resources used.
Learn that the 'opportunity cost' is the value of the next best alternative foregone when making a decision, which is the true economic cost of any choice.
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