Opportunity cost represents the best alternative sacrificed for a chosen alternative. This means that when a choice is made, the opportunity cost is the value of the next best alternative that had to be given up. This is important to consider when making decisions because it helps to determine the true cost of a decision, including the potential benefits and drawbacks of each alternative.

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Opportunity Cost

Question 11

Multiple Choice

Opportunity cost:

A) represents the best alternative sacrificed for a chosen alternative.
B) has no relationship to the various alternatives that must be given up when a choice is made in the context of scarcity.
C) represents the worst alternative sacrificed for a chosen alternative.
D) Represents all possible alternatives sacrificed for a chosen alternative.

Correct Answer: