All production involves an opportunity cost because
A) to produce costs money
B) costs of production are sky rocketing
C) to produce more of one thing,we must produce more of everything
D) to produce more of one thing,we must produce less of something else
E) when an individual obtains more of a good,he may not be fully satisfied

Question

Quizplus · Accepted Answer

Opportunity cost refers to the value of the next best alternative forgone as a result of choosing one option over another. This means that in order to produce more of one thing, we must give up the opportunity to produce something else. Therefore, option D is correct as it correctly identifies that in order to produce more of one thing, we must produce less of something else, i.e., there is an opportunity cost involved. Options A, B, and E are incorrect as they do not accurately describe the concept of opportunity cost. Option C is incorrect as it suggests that to produce more of one thing, we must produce more of everything, which is not necessarily true.

All Production Involves an Opportunity Cost Because