What Are Opportunity Costs? How Do Explicit and Implicit Costs

question 135

Essay

What are opportunity costs? How do explicit and implicit costs relate to opportunity costs?

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Definitions:

Independent Events

Two or more events whose occurrence or outcome do not affect each other's probability of happening.

Seat Belts

Safety devices installed in vehicles, designed to secure the passenger or driver in place to reduce harm in case of accidents or sudden stops.

Probability

An assessment of an event's chances of occurring, measured as a value from 0 to 1.

Random

Referring to an event or selection process that has no specific pattern, order, or aim, and is governed by chance.