An opportunity cost is
A)the dollar amount that is paid.
B)anything the decision maker believes costs to be.
C)whatever is paid out and cannot be reduced or reversed.
D)another term for all the sunk costs.
E)the benefits of the highest-valued alternative forgone.

Question

Quizplus · Accepted Answer

Opportunity cost is the value of the next best alternative that is foregone when making a decision. Therefore, the correct choice is E, which defines opportunity cost as the benefits of the highest-valued alternative forgone.

An Opportunity Cost Is