Question

Ken is trying to decide between two apartments for rent. Both places have two bedrooms, one bathroom, a living space, and a kitchen. But one apartment costs less than the other. Ken decides to rent the less-expensive place. The other apartment represents the _____ .

Answer 1

Answer: Opportunity cost.

Explanation:

The opportunity cost is the prize an individual pays for selecting an option out of all other available similar options. The opportunity cost of renting the cheaper apartment is that Ken won't be able to rent the other costlier apartment.