Economics • Economic BasicsEasy
Which of the following best defines 'Opportunity Cost' in economic decision-making?
A. The explicit monetary expenses incurred during the production of goods
B. The value of the next best alternative foregone when a choice is made✓ Correct Answer
C. The total revenue lost due to unexpected market fluctuations
D. The fixed costs of machinery and plant depreciation over time
💡 Solution & Explanation
Opportunity cost refers specifically to the value of the next best alternative given up whenever a scarce resource is allocated to a particular choice. Explicit monetary expenses measure accounting costs rather than the broader economic trade-offs involved in decision-making.
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