Opportunity Cost Is

question 68

Multiple Choice

Opportunity cost is

• A) the additional cost incurred from the consumption of one more unit of output.
• B) the cost involved when choosing between alternatives.
• C) the cost of production which cannot be recaptured.
• D) the total cost incurred from the consumption of additional output.

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Definitions:

Opportunity Cost

The expense incurred by not choosing the second-best option available during decision-making.

Marginal Product

The additional output produced as a result of employing one more unit of a particular input, assuming all other inputs remain constant.

Total Cost

The complete cost of production, including both fixed and variable costs, incurred by a business in the production of goods or services.

Input Price

The cost of resources or raw materials used in the production of goods and services.