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Chapter 1: Problem 7

Is it possible for a person to incur an opportunity cost without spending any money? Explain.

Short Answer

Expert verified
Yes, it's possible to incur an opportunity cost without spending money. Opportunity cost involves more than monetary transactions, it concerns what is given up to gain something else, which could be time, effort, or even a lost opportunity.

Step by step solution

01

Understanding Opportunity Cost

Opportunity cost refers to the value of something that must be given up to acquire something else. Each action, choice, or decision has an associated opportunity cost.
02

Analyzing the Context

The question asks if it's possible to experience an opportunity cost without spending money. Logically, since opportunity cost relates to 'giving something up', it includes more than just monetary transactions. Time, for instance, can be an opportunity cost.
03

Explaining the possibility

Since opportunity costs relate to what you give up to do or get something, one can definitely incur opportunity costs without spending money. For instance, the time you allocate to one activity cannot be spent on another. If you decide to spend an hour reading a book, you can't use that same hour for a run. Here, the opportunity cost of the time spent reading is the missed run - and no money was spent.

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