Final answer:
Opportunity cost is the cost of a decision measured by the value of the next best choice. It is the most desirable alternative that is given up when making a decision.
Step-by-step explanation:
The cost of a decision as measured by the value of the next best choice is referred to as opportunity cost. Opportunity cost is the most desirable alternative that is given up when making a decision. It represents the value of the alternative that is forgone.
For example, let's say you have the option to go to a movie or a concert on Friday night, but you also have other alternatives such as volunteering at a soup kitchen, visiting your grandparent, or working at a part-time job. If your next best alternative is visiting your grandparent, then the opportunity cost of going to the movie or concert would be the value you place on spending that time with your grandparent.
Opportunity cost varies from person to person since we all have different wants and needs.