Question

____ are costs of selecting one opportunity or investment over another. A) Sunk costs B) Variable costs C) Opportunity costs D) Fixed costs

Answer 1

Opportunity costs are costs of selecting one opportunity or investment over another. Option c is correct.

Step-by-step explanation:

​Costs of selecting one opportunity or investment over another are known as opportunity costs. These costs represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another.

Unlike sunk costs, which are past and unchangeable expenses, opportunity costs focus on future potential and are a critical part of making economic decisions about resource allocation. For example, if a business chooses to invest in project A instead of project B, the opportunity cost is the forgone benefit that could have been gained from project B.

In economic theory, opportunity costs are a fundamental principle, highlighting the choices businesses and individuals must make with limited resources. Understanding how to evaluate these costs allows for better decision-making. Since opportunity costs are about the benefits of the next best choice, they can vary dramatically based on the specifics of a situation and what is being foregone.

Option c is correct.