Opportunity costs exist because
A) the decision to engage in one activity means forgoing some other activity.
B) wants are scarce relative to resources.
C) households and businesses make rational decisions.
D) most decisions do not involve sacrifices or trade-offs.

Question

Quizplus · Accepted Answer

Opportunity cost is the cost of forgoing the next best alternative when making a decision. Therefore, choice A is the best answer as it correctly explains that when we choose to engage in one activity, we must give up the opportunity to engage in some other activity.

Opportunity Costs Exist Because