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What does opportunity cost mean in livelihood strategy?

Answer and explanation

Correct answer: Value of the next best option given up when one option is chosen

The direct answer is A: opportunity cost is the value of the next best option given up when one option is chosen. A livelihood decision always uses limited time, money, labour or land, so choosing one path means sacrificing another. For example, if a person uses a day to work for wages instead of attending training, the valuable training opportunity may be the opportunity cost. Option A is correct because it includes both choice and the best sacrificed alternative. B is wrong because unearned income is not the definition. C is wrong because resource absence is scarcity, not opportunity cost. D is wrong because opportunity cost need not be cash or profit; it may be time, learning or another benefit. Memory cue: opportunity cost means “what is the next best thing I gave up?”

Related tags

Opportunity-CostLivelihood-DecisionChoice

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