Multiple Choice
A(n) ____ cost is the potential benefit lost by taking an action instead of an alternative action.
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0. Basic Principles of Economics
Scarcity and Choice
Multiple Choice
Opportunity costs can be viewed in terms of:
A
the resources used in producing a good or service
B
the total monetary cost of all available options
C
the value of the next best alternative forgone
D
the sum of all possible benefits from every alternative
Verified step by step guidance1
Understand the concept of opportunity cost: it represents the value of the next best alternative that must be given up when making a choice.
Recognize that opportunity cost is not about the total monetary cost or the sum of all possible benefits, but specifically about what you sacrifice by not choosing the next best option.
Identify that resources used in producing a good or service are related to costs, but opportunity cost focuses on the value of the alternative use of those resources.
Recall the formal definition: Opportunity cost = value of the next best alternative forgone.
Apply this understanding to evaluate choices by comparing the benefits of the chosen option against the benefits of the next best alternative that is not chosen.
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