15 questions · 15 marks · ≈ 15 min
The Norwegian government chose to spend the profits from oil on stocks, bonds and property. The possibility of improving domestic infrastructure, therefore, was not taken.
Which economic concept does this best illustrate?
Choose your answer
cost of production
finite resources
opportunity cost
production possibility frontier
Samira is deciding whether to spend her evening watching a movie or studying for her upcoming exam. If she chooses to watch the movie, what is the opportunity cost of her decision?
Choose your answer
The enjoyment and entertainment she gets from watching the movie
The knowledge and understanding she gains from studying for her exam
The time and money spent on going to the movie theatre
The potential grade she could have earned on the exam
A student has time to either attend a sports practice or participate in a school club meeting. If the student decides to attend the sports practice, what is the opportunity cost of this decision?
Choose your answer
The fun and physical activity experienced during sports practice
The knowledge, skills and social enjoyment gained from participating in the school club meeting
The time spent commuting to and from the sports practice
The social interactions in the school club meeting
A farmer has a small plot of land and can either grow corn or tomatoes. If the farmer chooses to grow tomatoes, what is the opportunity cost of this decision?
Choose your answer
The yield and revenue generated from the tomato harvest
The potential revenue from growing corn
The cost of purchasing tomato seeds and fertilizer
The value of the land allocated for tomato cultivation
A restaurant owner has a limited budget and can either upgrade the kitchen equipment or hire additional staff. If the owner chooses to hire additional staff, what is the opportunity cost of this decision?
Choose your answer
The sales revenue generated by the new workers
The productivity and input of new staff members
The productivity and input of the new kitchen equipment
The cost of hiring and training the new staff
Sam wrote a list of how he would prefer to spend his Saturday afternoon.
| first choice second choice third choice fourth choice | go to a cricket match watch the annual town parade go to the cinema visit relatives |
|---|
Unfortunately a thunderstorm caused the cricket match and the town parade to be cancelled. Sam went to the cinema. What was the opportunity cost of going to the cinema?
Choose your answer
going to a cricket match
watching the annual town parade
visiting relatives
losing his Saturday free time
A farmer reduces the land used to grow wheat from 80 hectares to 60 hectares and increases the use of the land for growing potatoes from 80 to 100 hectares.
What is the opportunity cost of this change?
Choose your answer
The output from 20 hectares used for growing potatoes.
The output from 20 hectares used for growing wheat.
The output from 60 hectares used for growing wheat.
The output from 80 hectares used for growing potatoes.
In recent years more golf courses, which use large quantities of water, have opened in China. What may be the opportunity cost of this?
Choose your answer
cost of water
loss of farmland
sales of golf equipment
wages of golf course staff
Which of the following best explains the concept of opportunity cost?
Choose your answer
The total cost incurred when producing goods and services.
The cost of the next best alternative foregone when making a choice
The difference between total revenue and total expenses in a business
The cost of raw materials and labor required for production
If a farmer decides to allocate more land to grow wheat instead of corn, what is the opportunity cost of this decision?
Choose your answer
The additional revenue generated from selling the extra wheat
The potential profits from growing corn on the same land
The cost of purchasing more seeds and fertiliser for wheat cultivation
The value of the land allocated to wheat farming
A deposit of shale oil is discovered in an area of farming. The following estimates are made for a ten-year period.
What is the opportunity cost of using the land only for farming?
Choose your answer
$25 billion
$30 billion
$35 billion
$45 billion
A city council is deciding whether to allocate funds to build a new library or a sports complex. The library is estimated to cost $8 million and will serve the educational needs of the community. The sports complex is estimated to cost $12 million and is expected to attract sports events and boost tourism revenue. What is the opportunity cost of building the sports complex?
Choose your answer
The potential tourism revenue generated by the sports complex
The educational benefits provided by the new library
The total cost of both the library and the sports complex
The $12 million spent on building the sports complex
The diagram shows the production possibility curve (PPC) of an economy producing at point X.
What would be the opportunity cost of moving from point X to produce only capital goods?
Choose your answer
60 units of consumer goods
70 units of capital goods
100 units of capital goods
180 units of consumer goods
A company is considering whether to invest in research and development (R&D) for a new product line or allocate resources to expand its existing product line. The R&D investment is expected to cost $5 million and could lead to high returns. The expansion of the existing product line would cost $3 million. What is the opportunity cost of choosing to expand the existing product line?
Choose your answer
The potential returns from the R&D investment
The cost of expanding the existing product line - $3m
The combined cost of R&D and expanding the product line - $8m
The potential benefits from the expansion of the product line
A student is trying to decide between attending a summer internship that pays $3,000 or taking a summer course that costs $1,500. The internship is related to the student's career field, while the course will enhance their skills. What is the opportunity cost of choosing the summer course?
Choose your answer
The potential career advancement from the internship
The skills and knowledge gained from taking the summer course
The tuition fee for the summer course - $1,500
The $3,00 lost in income from the apprenticeship by attending the summer course