Question

Opportunity cost A. does not exist since there are no receipts. B. is always the value of the next best forgone opportunity. C. can only be measured as a paid cost. D. is always the lowest valued alternative.

Answer 1

B. is always the value of the next best forgone opportunity.

Step-by-step explanation:

Opportunity cost is the value of the next best alternative to any decision you make; for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you cannot spend the money on something else. If your next-best alternative to seeing the movie is reading the book, then the opportunity cost of seeing the movie is the money spent plus the pleasure you forgo by not reading the book.