Question

An opportunity cost is the a. monetary price paid for a good or service. b. cost of finding the lowest price for a product. c. lowest possible cost. d. highest possible cost. e. cost of a purchase or decision as measured by what is given up.

Answer 1

Answer:

The opportunity cost is e. cost of a purchase or decision as measured by what is given up.

Explanation:

The opportunity cost can be defined as the cost of giving up the benefits associated with the next best alternative that is given up. It is also referred to as the loss of potential gain that is given up when one option is chosen over the other.

For example, If you have a choice of working at a company for salary of $10000 per year or starting your own business that is expected to earn $15000 per year, the opportunity cost of choosing to start your own business is the $10000 per year from the job that is given up.