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Opportunity cost: a) applies only to consumption decisions

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Opportunity cost:

a) applies only to consumption decisions.

b) applies only to production decisions.

c) is the same as monetary cost.

d) exists because of scarcity.

e) is irrelevant for wealthy economies.

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Opportunity cost d) exists because of scarcity.

Scarcity means that the resources needed to satisfy human wants are limited. Since the resources are scarce, individuals have to make choices among competing needs. The tradeoffs encountered in society implies that governments and persons compare benefits and costs of different alternatives when making decisions.