Question

In the context of economic feasibility, which statement is true of opportunity costs?

1) They measure fixed and variable costs involved in running a system.
2) They measure costs involved in training employees who will be using the information system.
3) They measure the changes in the scope of an information system after the analysis and design phases.
4) They measure what an individual would miss by not having an information system or feature.

Answer 1

Opportunity costs measure the benefits that are lost when choosing one alternative over another, important in economic feasibility analysis.

Step-by-step explanation:

In the context of economic feasibility, the true statement about opportunity costs is that they measure what an individual would miss by not having an information system or feature. Opportunity costs represent the benefits that are lost when one alternative is chosen over another. These costs measure cost by what we forgo in exchange, and they do not only account for monetary expenses but also include time or other actual resources that we must forfeit. When analyzing the economic feasibility of an information system, considering opportunity costs helps to weigh the potential value of the system against what the business will give up by investing in this option as opposed to another.

Opportunity cost measures the value of what we give up in order to choose one option over another. It represents the benefits or opportunities we miss out on by choosing a particular course of action. In the context of economic feasibility, option 4) is true: opportunity costs measure what an individual would miss by not having an information system or feature.