Advanced Placement (AP) High School

Which situation best illustrates the economic concept of opportunity cost?
O A. A business spends money on new computers, so it can't afford
new office furniture.
B. A business invests in finding new customers rather than rewarding
current customers.
C. A business plans to invest all of its profits back into the company
to keep growing.
D. A business looks for workers overseas, so it has to hire a
multilingual staff.

Answers

Answer 1

Answer:

A

Explanation:

believe what I tell you I just took the test

Answer 2

A business spends money on new computers, so it can't afford new office furniture best illustrates the economic concept of opportunity cost. The correct option is A.

What is business?

A business is an organisation or entity that produces and sells goods or services to customers through commercial, industrial, or professional activities.

It can be a sole proprietorship, partnership, corporation, or any other type of profit-generating organisation.

A company that spends money on new computers but cannot afford new office furniture exemplifies the economic concept of opportunity cost.

The cost of passing up one option in favour of another is known as opportunity cost. In this case, the opportunity cost of buying new computers is the missed opportunity to buy new office furniture.

Based on its priorities and available resources, the company must decide which option is more important.

Thus, the correct option is A.

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