Suppose you are deciding whether to spend your tax rebate check on a new iPod or a new digital camera. You are dealing with the concept of
A) equity.
B) comparative advantage.
C) opportunity costs.
D) the fallacy of composition.

Question

Quizplus · Accepted Answer

Opportunity cost refers to the value of the next best alternative that you give up when making a choice. In this scenario, choosing between spending on an iPod or a digital camera involves considering what you forego by not choosing the other option.

Suppose You Are Deciding Whether to Spend Your Tax Rebate