Question

hboard> My courses >19/WI BEC-151-99> Part 1: Introduction to Economics and Macroeconor Question 5 Not complete Points out of 3.00 P Flag question The opportunity cost of a choice is: Select one: a. the opporti ty of using the money to buy something else cheaper. b. the mu. ey cost that a person does not have to pay when doing something. C. the money that a buyer has to pay for an item. d. the value of the next best opportunity foregone. Check Type here to search SAMSUN F2 F3 F4 F5 F7 O+

Answer 1

Answer is d: the value of next best alternative forgone.

opportunity cost is the value of next best alternative that you forgo when you make a choice. For example if you have $1000 and there are two possible choices you can make. either lend it to your friend for a year or save it in a bank at a rate of 10 Per cent per annum. Then if you choose to lend this $1000 to your friend, the opportunity cost of making this choice is the next best choice that was available to you i.e. earning 10% interest on $1000 which is equal to $100.