In economics, a commodity is said to have an opportunity cost because
In economics, a commodity is said to have an opportunity cost because
- A) the price of the commodity is high
- B) the commodity is scare
- C) another good may have been purchased instead of it
- D) the commodity provides many benefits
Correct Answer: C) another good may have been purchased instead of it
Explanation
In economics, a commodity refers to a good or service that is traded in the market. An opportunity cost refers to the cost of an alternative that must be forgone in order to pursue a certain action. Therefore, a commodity is said to have an opportunity cost because choosing to consume or purchase it means that an individual must give up the opportunity to consume or purchase another good.
The question asks why a commodity has an opportunity cost and presents four options to choose from. Option A suggests that a commodity has an opportunity cost because the price of the commodity is high, but this is incorrect. The price of a commodity does not determine its opportunity cost.
Option B suggests that a commodity has an opportunity cost because it is scarce. While scarcity may affect the price of a commodity, it does not necessarily mean that the commodity has an opportunity cost.
Option C is the correct option. It suggests that a commodity has an opportunity cost because choosing to consume or purchase it means that an individual must give up the opportunity to consume or purchase another good.
Option D suggests that a commodity has an opportunity cost because it provides many benefits. However, this does not necessarily imply that the commodity has an opportunity cost.
To summarize, a commodity has an opportunity cost because choosing to consume or purchase it means that an individual must give up the opportunity to consume or purchase another good.