Which of the following statements about the opportunity cost of an item is the most accurate?
A) It is the value of all available alternatives you sacrifice to get that item.
B) It is always equal to the dollar value of the item.
C) It is greater during periods of inflation and lower during periods of deflation.
D) It is the highest valued alternative you give up to get that item.

Question

Quizplus · Accepted Answer

The opportunity cost of an item is the highest valued alternative that must be given up to obtain that item. It is not necessarily equal to the dollar value of the item, and it is not affected by inflation or deflation. Option A is also close to being correct, but it includes all available alternatives, whereas the correct answer is the highest valued among those alternatives.

Which of the Following Statements About the Opportunity Cost of an Item