Opportunity costs may involve both explicit costs (paid out-of-pocket) and implicit costs (not paid out-of-pocket, such as the value of time or forgone alternative uses of resources). Therefore, option A and B are not accurate. Option D is also not accurate because while time can be a factor in opportunity costs, it is not always the only measure used.

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Opportunity Costs

Question 77

Multiple Choice

Opportunity costs:

A) only include explicit costs paid out-of-pocket.
B) never involve costs paid out-of-pocket.
C) may or may not involve costs paid out-of-pocket.
D) are always measured in terms of time.

Correct Answer: