The concept of 'Opportunity Cost' is best defined as: MCQ with Answer and Explanation

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The concept of 'Opportunity Cost' is best defined as:

A. The cost of producing one more unit of a commodity

B. The difference between total revenue and total cost

C. The total cost incurred in production

D. The value of the next best alternative forgone

Answer: Option D

Solution (By JKSSB Mock Tests)

Opportunity cost refers to the value of the next best alternative that is sacrificed when a choice is made. It is a fundamental concept in economics.

This question belongs to: Economy GK Economy Set 1

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Question #1

Which of the following is a feature of the 'Dornbusch Overshooting' model?

A. Prices are fully flexible and exchange rates never overshoot

B. Only real shocks matter

C. Exchange rates always adjust gradually

D. Exchange rates may overshoot their long-run values in response to monetary shocks because of sticky prices

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Correct Answer: Option D

Explanation:
In Dornbusch’s overshooting model, sticky goods prices cause the exchange rate to jump more than proportionally to a monetary shock in the short run so that uncovered interest parity can hold.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Goods and Services Tax' on e-commerce operators is:

A. they collect tax at source

B. not applicable

C. only 5%

D. only 18%

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Correct Answer: Option A

Explanation:
E-commerce operators collect tax at source under GST.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Index of Eight Core Industries' is released by:

A. NITI Aayog

B. Ministry of Commerce and Industry

C. RBI

D. Ministry of Finance

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Correct Answer: Option B

Explanation:
The Index of Eight Core Industries is released by the Ministry of Commerce and Industry.

This question belongs to: Economy GK Economy Set 1

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