The opportunity cost of any activity is defined as
A) the value of the least best alternative activity forgone.
B) the time one spends involved in the activity.
C) the value of the next best alternative activity forgone.
D) the income one spends on the activity.
E) the value of some unspecified alternative activity forgonE.

Question

Quizplus · Accepted Answer

Opportunity cost is the value of the next best alternative activity forgone. It is the cost of giving up one option in favor of another. Option A is almost correct, but the “least best” is not an accurate phrase to describe the opportunity cost. Option B and D are not correct because time and income spent on an activity are not necessarily the opportunity cost. Option E is too vague and does not provide a specific alternative forgone.

The Opportunity Cost of Any Activity Is Defined as