Question

Which statement best characterizes opportunity cost?

a. the amount of a good that businesses are able to produce
b. the amount of money left over after expenses have been paid
c. the value of a product that you give up in a tradeoff with another product
d. the amount of money left over after expenses have been paid​

Answer 1

c. the value of a product that you give up in a tradeoff with another product.

Step-by-step explanation:

The principle or concept of opportunity cost comes in when faced with alternative choices in a situation whereby only one option has to be selected or chosen. For instance, one is faced with a decision to make to select either of option A or option B. By choosing option A, option B is the opportunity cost and vice versa. The dividends or benefits of the option which isn't chosen is called the opportunity cost. In other words, the benefits of the foregone alternative is called the opportunity cost.