The opportunity cost of an action includes:

Question

Quizplus · Accepted Answer

The opportunity cost is the cost of the next best alternative forgone when making a decision. This includes both the monetary expenses (option a) and the highest valued alternative use of the time (option b), since both of these represent something that must be given up in order to pursue the chosen action. Option c represents the benefits received, which are not a cost but rather a benefit of the action. Therefore, the best choice is D, as it includes both the monetary expenses and the highest valued alternative use of the time as components of opportunity cost.

The Opportunity Cost of an Action Includes