What is opportunity cost?

What is opportunity cost?

• A. The monetary cost of a decision
• B. The amount of time spent
• C. What you give up
• D. The price you pay to acquire something

Answer: (C)

Opportunity cost is the value of the next-best use of your resources that you give up when you make a choice. It isn’t just the money spent or the time worked; it’s the benefit you would have gained from the alternative you didn’t choose. So the idea of “what you give up” best captures this concept. For example, if a town spends tax dollars on roads, the opportunity cost is the education or public services that could have been funded instead. The other ideas describe actual costs or payments, not the foregone benefits.

Opportunity cost is the value of the next-best use of your resources that you give up when you make a choice. It isn’t just the money spent or the time worked; it’s the benefit you would have gained from the alternative you didn’t choose. So the idea of “what you give up” best captures this concept. For example, if a town spends tax dollars on roads, the opportunity cost is the education or public services that could have been funded instead. The other ideas describe actual costs or payments, not the foregone benefits.