What are example of threats?

What are example of threats?

A threat is a potential for something bad to happen. A threat combined with a weakness is a risk. For example, a forecast for rain is a threat to your hair and a lack of an umbrella is a weakness, the two combined are a risk.

What is opportunity cost select the best answer?

Opportunity cost is the profit lost when one alternative is selected over another. The concept is useful simply as a reminder to examine all reasonable alternatives before making a decision. For example, you have $1,000,000 and choose to invest it in a product line that will generate a return of 5%.

What is opportunity cost formula?

The formula for calculating an opportunity cost is simply the difference between the expected returns of each option. Say that you have option A: to invest in the stock market hoping to generate capital gain returns.

What is opportunity cost explain with numerical example?

Explain with the help of a numerical example. An opportunity cost is the cost of an alternative that must be forgone in order to pursue a certain action. However if company’s return is only 3% when we could have made a return of 9% from FD, then our opportunity cost is (9% – 3% = 6%).

Why is opportunity cost important?

Opportunity Cost helps a manufacturer to determine whether to produce or not. He can assess the economic benefit of going for a production activity by comparing it with the option of not producing at all. He may invest the same amount of money, time, and resources in another business or Opportunity.

What is opportunity cost and its importance in decision making?

“Opportunity cost is the cost of a foregone alternative. If you chose one alternative over another, then the cost of choosing that alternative is an opportunity cost. Opportunity cost is the benefits you lose by choosing one alternative over another one.”

What is opportunity cost diagram?

Definition – Opportunity cost is the next best alternative foregone. If we spend that £20 on a textbook, the opportunity cost is the restaurant meal we cannot afford to pay. If you decide to spend two hours studying on a Friday night. The opportunity cost is that you cannot have those two hours for leisure.

What are the limitations of opportunity cost?

The disadvantages of opportunity cost are;

• Time: Opportunity costs take time to calculate and consider.
• Lack of Accounting: Though useful in decision making, the biggest drawback of opportunity cost is that it is not accounted for by company accounts.

Under what condition is opportunity cost zero?

Opportunity cost is zero when you have no other choices. Example would be being born. You literally have no choice over that.

What are the assumptions of opportunity cost theory?

(i) The economic system is in a state of full employment equilibrium. (ii) There is perfect competition in commodity and factor markets. (iii) Price of each commodity equals the marginal cost of producing it. (iv) Price of each factor equals its marginal productivity.

What are the determinants of cost?

Cost function is the representation of the relationship between the cost and its determinants such, as the size of plant, level of output, input prices, technology, managerial efficiency, etc.

What is cost and type of cost?

Cost is the monetary value that a company has spent to produce something. The cost denotes the amount of money that a company spends on the creation or production of goods or services. It does not include the mark-up for profit.

What are the determinants of production?

The four determinants of productivity are: (1) Physical capital, which is the stock of equipment and structures that are used to produce goodsand services; (2) Human capital, which consists of the knowledge and skills that workers acquire througheducation, training, and experience; (3) Natural resources, which are …

On what factor does the total annual cost depends upon?

The cost to the firm of producing any output evidently depends upon the physical quantities of actual resources or services—labour, material, machine hours, and so forth—used in production. Thus, the cost of producing a tons of steel depends upon the quantities of iron ore, limestone, coal, blast-furnace, etc.