Which of the following statements about the concept of opportunity cost is true?
A)The opportunity cost of a decision is the cost of all possible alternatives to the good produced.
B)Many decisions do not involve an opportunity cost.
C)If you have an economics final and an American history final tomorrow,the opportunity cost of studying five hours for your economics exam is the five hours you cannot study for your history exam.
D)The opportunity cost of a college education at a school where you have to drive 100 miles per week is the cost and maintenance of owning an automobile to drive to and from school.

Question

Quizplus · Accepted Answer

The concept of opportunity cost refers to the cost of the best alternative forgone, or the cost of what you could have done instead of the chosen option. Therefore, if you choose to study for your economics exam, the opportunity cost is the time you could have spent studying for your history exam. Option A is incorrect because the opportunity cost refers only to the best alternative forgone, not all possible alternatives. Option B is incorrect because every decision involves an opportunity cost. Option D is incorrect because the opportunity cost of a college education at a school where you have to drive 100 miles per week is not the cost of owning a car, but instead the cost of other possible alternatives, such as attending a school that is closer to your home.

Which of the Following Statements About the Concept of Opportunity