Question

A student has ₹100 and must choose between buying a notebook or saving the money for buying a tennis racket later. Which economic concept best explains this situation?

Options

• Demand

• Opportunity cost

• Production

• Inflation

Answer 1

Opportunity cost

Explanation:

 The student has only ₹ 100 and cannot buy both the notebook and the tennis racket. If the student buys the notebook, they have to give up the chance to save the money for the tennis racket. This is called opportunity cost because choosing one option means giving up the other.