Opportunity cost is best defined as
A) a situation in which one individual cannot have an absolute advantage over another individual in the production of all goods.
B) the amount of money that an individual is willing to pay to purchase a good that means a great deal to that person.
C) the highest-valued alternative that is forgone when choosing among various alternatives.
D) the amount of money lost by one individual in an exchange process so that another individual might gain.

Question

Quizplus · Accepted Answer

Opportunity cost refers to the value of the best alternative that is given up in order to choose a certain option. It is the cost of the next best alternative that must be given up in order to pursue an action or decision. Option A refers to the concept of comparative advantage, while Option B refers to the willingness-to-pay for a good or service. Option D does not accurately reflect what opportunity cost means.

Opportunity Cost Is Best Defined as