Final answer:
The highest valued alternative forgone to do something else is known as opportunity cost, which is reflected in the value of the next best alternative not chosen.
Step-by-step explanation:
The Concept of Opportunity Cost
Economists define opportunity cost as what one must give up to obtain what they desire. This concept illustrates the trade-offs that individuals face when making decisions, emphasizing that choosing one option involves forgoing the next best alternative. To understand this better, consider the example of Alphonso, who has to decide between buying a burger or keeping his bus tickets. The opportunity cost of a burger for him is the four bus tickets he would have to surrender. He will weigh this decision based on whether the utility of the burger exceeds that of the bus tickets.
Returning to the student's question, the correct answer to 'The highest valued alternative you forego or sacrifice to do something else is known as:' is b. Opportunity cost.