How are changes in opportunity cost related to decision-making behavior?
A) The lower the opportunity cost of doing activity X,the more likely activity X will be done.
B) The higher the opportunity cost of doing activity X,the more likely activity X will be done.
C) Changes in the opportunity cost play no role in decision making.
D) The lower the opportunity cost of doing activity Y,the more likely activity X will be done.
E) The higher the opportunity cost of doing activity Y,the less likely activity X will be done.

Question

Quizplus · Accepted Answer

Opportunity cost refers to the value of the next best alternative foregone. When the opportunity cost of doing a particular activity is low, it means that there is less to lose by choosing that activity over other alternatives. As a result, individuals are more likely to choose that activity. This is because the potential gain from the activity exceeds the cost of forgoing other options. Therefore, the lower the opportunity cost of doing activity X, the more likely activity X will be done.

How Are Changes in Opportunity Cost Related to Decision-Making Behavior