WBCS.LIVE practice question

In microeconomics, opportunity cost is most accurately defined as what?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. The total financial cost of producing a good.
  2. The value of the next best alternative forgone.
  3. The fixed cost associated with a business decision.
  4. The sunk cost that cannot be recovered.

Correct answer and explanation

Correct answer: The value of the next best alternative forgone.

Explanation: āœ… Correct Answer: B) The value of the next best alternative forgone. šŸ“š Explanation: Because resources are inherently scarce, making any economic choice necessarily involves sacrificing other potential options. The opportunity cost represents the value or benefit of the next best alternative that must be given up when a specific decision is made. For example, the opportunity cost of studying for an hour is the wage you could have earned if you had chosen to work instead.