Author Question: Why are all costs really opportunity costs?[br][br][b][color=#FBB117]Question ... (Read 89 times)

clmills979 · **on:** Jun 30, 2018

Why are all costs really opportunity costs?

Question 2

Discuss the three fundamental economic questions that all nations must address.

momo1250 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

An opportunity cost is what must be given up in order to get something else. Although it is convenient to measure many costs in monetary terms, ultimately all costs (some of which cannot be easily measured in monetary terms) are opportunity costs because there is always something that must be given up in order to get something else.

Answer to Question 2

The three fundamental economic questions are the What, How, and For Whom questions which must be addressed by all societies. The What question pertains to what should the nation produce. What combination of goods would be best? How should that combination of goods be produced is the How question. We want to produce goods in the most efficient manner in order to maximize production. The For Whom question addresses for whom should these goods be produced. Who will get them?