How are money cost and opportunity cost related to each other?
A)If markets function well, they are closely related.
B)They are always identical in any economic system.
C)Opportunity cost must always exceed money cost.
D)Money cost is greater than or equal to opportunity cost.
E)In a market economy, they must be equal to each other.

Question

Quizplus · Accepted Answer

In a well-functioning market, the price of a good or service represents the money cost, which is the amount of monetary resources that must be given up to acquire it. However, individuals also have an opportunity cost, which is the value of the next best alternative foregone. When making economic decisions, individuals weigh the money cost against their opportunity cost to determine the best course of action. Thus, if markets function well, money cost and opportunity cost are closely related to each other.

How Are Money Cost and Opportunity Cost Related to Each