Question

Which of the following best explains why considering opportunity costs is a

rational thing for consumers to do?
A. What you sacrifice for a decision is one of the non-monetary costs
of many choices.
B. All choices for something involve giving something else up.
C. Knowing how much one more unit will cost is important
information.
D. It is impossible to know the utility of something without
understanding its opportunity cost.

ANSWER IS A

Answer 1

What you sacrifice for a decision is one of the non-monetary costs of many choices explains why considering opportunity costs is a rational thing for consumers to do.

Step-by-step explanation:

• Costs of opportunity reflect the benefits that a person, investor or company loses in choosing one alternative over another.
• Although financial reports show no cost of opportunity, business owners should use it when they have many choices before them to make informed decisions. Since they are unnoticed by nature, it is easy to underestimate the costs of opportunity if one is not cautious.
• When selecting one project over another, knowing the possible lost opportunities foregone makes for better decision-making.