The opportunity cost of an action is always equal to:
A)the monetary expense incurred as a result of the action.
B)the value of any alternative use of the time expended on the action.
C)the highest valued alternatives sacrificed as a result of the action.
D)the sum of the benefits received as a result of the action.

Question

The opportunity cost of an action is always equal to:
A)​the monetary expense incurred as a result of the action.
B)​the value of any alternative use of the time expended on the action.
C)​the highest valued alternatives sacrificed as a result of the action.
D)​the sum of the benefits received as a result of the action.

Quizplus · Accepted Answer

Opportunity cost refers to the value of the next best alternative foregone as a result of making a choice. Therefore, the correct answer is the highest valued alternatives sacrificed as a result of the action, which is option C. Option A is incorrect because not all opportunity costs involve monetary expenses, and option B is incorrect because time is just one of the potential costs of an action. Option D is incorrect because the benefits received from an action are not the same as the opportunity cost.

The Opportunity Cost of an Action Is Always Equal To