Opportunity cost is the value of the next best alternative, which is usually not explicit and measurable in dollar values. It includes both explicit and implicit costs, such as lost wages or foregone leisure time when making a decision. Therefore, option B is the correct answer.

Solved

Opportunity Cost

Question 48

Multiple Choice

Opportunity Cost:

A) only includes explicit, out of pocket expenses.
B) is the value of your next best alternative.
C) is never provided in dollar values.
D) would not include lost wages from working when deciding to take a vacation.

Correct Answer: