Indian Economy Questions

In economics, the cost of something is what you give up to get it.

Opportunity cost is the cost of other alternative choices for making your interested choice of work. Oppurtunity cost is also called as alternative cost.

For example on a holiday, you have two choices to do, either you can go to movie or a function. And if you chose to go to moavie, the oppurtunity cost of going to movie is the value that would have gotten if you had gone to function.

The law of increasing opportunity costs states that as you increase production of one good, the opportunity cost to produce an additional good will increase.

A negative supply shock in the sho rt run causes the aggregate supply curve to shift to the left.

Value added is determined by the difference between the price of product or service and the cost of producing it.

Added Value = Price that the product or service is sold at - cost of producing the product.