Question

The opportunity cost of an item is

a.
always less than the dollar value of the item.
b.
what you give up to get that item.
c.
always greater than the cost of producing the item.
d.
the number of hours that one must work in order to buy one unit of the item.

Answer 1

The opportunity cost of an item is what you give up to get that item, representing the value of the next best alternative foregone. It varies from person to person, as each individual assesses the value of alternatives differently, and sometimes involves factors beyond mere price, like time.

Step-by-step explanation:

The opportunity cost of an item is what you give up to get that item. This concept is fundamental in economics and represents the value of the next best alternative that is foregone when making a choice. For instance, if Alphonso decides to buy a burger, the opportunity cost might be the four bus tickets he cannot purchase because he chose to spend his money on the burger instead. He will make his decision based on whether he values the burger more than the opportunity to ride the bus those additional times.

It's important to note that while price can sometimes indicate opportunity cost, it doesn't always accurately capture the full value of what is given up, especially when time is a factor. Everyone's opportunity cost will vary, as each individual values alternatives differently, based on their personal needs and wants.