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What is opportunity cost?
Answer: Opportunity cost is a term used in economics, to mean the cost of something in terms of an opportunity foregone (and the advantages that could be received from that opportunity), or the most valuable foregone alternative. For instance, if a city decides to build a hospital on vacant land that it owns, the opportunity cost is some other thing that may have been done with the land and construction funds instead.
M.Phil. Admission Test, 2017 Economics Model Question Group A Domain Knowledge in Economics Correct answer is as marked in black. Micro Economics 1. Consider a utility function U =
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