Opportunity cost is defined as
A)the benefit of an activity.
B)the monetary expense associated with an activity.
C)the highest valued alternative that must be given up to engage in an activity.
D)the total value of all alternatives that must be given up to engage in an activity.

Question

Quizplus · Accepted Answer

Opportunity cost is the value of the highest foregone alternative when choosing one option. Therefore, the correct option is C - "the highest valued alternative that must be given up to engage in an activity." Options A and B are incorrect because the benefit or monetary expense does not necessarily represent the opportunity cost. Option D is incorrect because it includes all alternatives, not just the highest valued one.

Opportunity Cost Is Defined as