Which of the following statements are correct?
I. The "highest- valued alternative given up to get something" is the opportunity cost.
II. Wealthy economies don't experience opportunity costs.
III. Scarcity creates opportunity costs.

Question

Quizplus · Accepted Answer

I is correct as opportunity cost is defined as the highest-valued alternative that is forgone to pursue a certain action.
II is incorrect as all economies, regardless of their wealth, face scarcity and thus opportunity costs.
III is correct as scarcity refers to limited resources and unlimited wants, which leads to choices and trade-offs, and ultimately the opportunity cost of choosing one option over another.

Which of the Following Statements Are Correct