The Opportunity Cost of an Activity Is the Value of

question 47

Multiple Choice

The opportunity cost of an activity is the value of

• A) an alternative forgone.
• B) the next-best alternative forgone.
• C) the least-best alternative forgone.
• D) the difference between the chosen activity and the next-best alternative forgone.
• E) the alternative one would have preferred to choose.

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Definitions:

Framing Effect

A cognitive bias where people decide on options based on whether they are presented in a positive or negative way.

Risky Strategy

In decision making, opting for an option with potentially higher rewards but also higher risks, often contrasted with a safe or conservative approach.

Gains

Benefits, improvements, or increases usually achieved through effort, such as in skills, knowledge, or material success.

Maximizing

A decision-making strategy which seeks the best possible outcome or solution.