The opportunity cost of any factor of production is
A)its explicit cost.
B)the money actually paid to the factors of production.
C)the benefit forgone by not using it in its worst alternative.
D)its accounting cost.
E)the benefit forgone by not using it in its best alternative.

Question

Quizplus · Accepted Answer

The definition of opportunity cost is the benefit forgone by not using a factor of production in its best alternative use. This means that the opportunity cost is not necessarily the money actually paid to the factor of production or its accounting cost, but rather the value of the next best alternative that could have been produced with that same factor of production.

The Opportunity Cost of Any Factor of Production Is