Question

Refers to the financial opportunity that is given up because you choose to do something else with your money:

a) Investment
b) Cost-benefit analysis
c) Opportunity cost
d) Return on investment

Answer 1

Opportunity cost refers to the financial opportunity that is given up because you choose to do something else with your money.

Step-by-step explanation:

Economists use the term opportunity cost to indicate what one must give up to obtain what he or she desires. The idea behind opportunity cost is that the cost of one item is the lost opportunity to do or consume something else. In short, opportunity cost is the value of the next best alternative.

For example, if you choose to spend your money on buying a new video game console, the opportunity cost would be the financial opportunity you gave up to buy something else, such as investing that money in stocks.