WAEC Economics 2011 Paper

Concept:Money cost is the actual cash spent, while real cost is the value of the best alternative sacrificed.Explanation:The money cost of an item is the actual amount of money paid to buy it.The real cost is the opportunity cost, meaning the next best alternative forgone to obtain that item.For example, if ₦500 is spent on a book, the money cost is ₦500.The real cost is the other good or service that could have been bought with that same ₦500.Thus, the difference is that real cost refers to the alternative forgone, while money cost is the monetary payment made.So, option A is correct.Answer:A. Real cost is the alternative forgone while the money cost is the actual amount paid for buying the item.