The opportunity cost of a particular activity
A) is the same for everyone pursuing this activity
B) may include both monetary costs and forgone income
C) always decreases as more of that activity is pursued
D) usually is known with certainty
E) measures the direct benefits of that activity

Question

Quizplus · Accepted Answer

Opportunity cost includes not only monetary costs but also forgone income or benefits. It varies depending on the individual pursuing the activity and the alternatives they could have pursued instead. The opportunity cost may increase or decrease depending on the amount of the activity pursued, but it does not always decrease. It is not usually known with certainty, as it involves hypothetical alternatives. It does not measure the direct benefits of the activity, but rather the benefits of the next best alternative that was forgone.

The Opportunity Cost of a Particular Activity