Question

The relevant cost in economic decision-making is the opportunity cost of the resources rather than the outlay of funds required to obtain the resources. True or False?

Answer 1

Opportunity cost is the cost of forgoing the next best alternative in economic decision-making.

Step-by-step explanation:

The statement is true.

Opportunity cost is the cost of forgoing the next best alternative when making an economic decision. It takes into account the resources that are given up, rather than just the monetary cost. By considering the opportunity cost, we can make more informed decisions by evaluating the trade-offs involved.

For example, suppose you have the option to either study for an exam or go to a party. The opportunity cost of going to the party would be the potential higher grade you could have achieved if you had chosen to study instead.