The opportunity cost of a good is
A) the income you forgo to get it.
B) the lowest valued alternative you give up to get it.
C) the highest valued alternative you give up to get it.
D) all alternatives you give up to get it.

Question

Quizplus · Accepted Answer

The opportunity cost of a good is the highest valued alternative that one gives up in order to acquire that good. Option C is the only one that accurately represents this concept. Option A is incorrect because it only considers the income you forgo to get the good, which may not fully capture the value of other options given up. Option B is incorrect because it only considers the lowest valued alternative, which may not be the most valuable alternative given up. Option D is incorrect because it is too broad - it includes all alternatives, even those that may not be relevant to the decision at hand.

The Opportunity Cost of a Good Is