Opportunity Costs Are

question 103

Multiple Choice

Opportunity costs are

• A)considered to be fixed costs in the short-term.
• B)another term for sunk costs.
• C)costs that are controlled by most effective managers.
• D)the value of benefits forgone when one decision alternative is selected over another.

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Definitions:

Adverse Selection

A situation where asymmetry of information results in high-risk individuals being more likely to participate in an agreement or market, leading to an inefficient outcome.

Moral Hazard

The situation where one party may take risks because they do not bear the full consequences or financial burden of their actions.

Health Insurance

A type of insurance coverage that pays for medical and surgical expenses incurred by the insured or provides reimbursement for health expenses.