The Term Opportunity Cost Refers to the

question 60

Multiple Choice

The term opportunity cost refers to the

• A)value of what is gained when a choice is made.
• B)difference between the value of what is gained and the value of what is forgone when a choice is made.
• C)value of what is forgone when a choice is made.
• D)direct costs involved in making a choice.

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Definitions:

Adverse Selection

A situation where unfair advantage is taken of a transaction due to asymmetric information between buyers and sellers.

Adverse Selection

A situation in insurance and finance where those with higher risks are more likely to seek insurance or loans, leading to an imbalanced pool that can raise costs for insurers or lenders.

High-Quality Used Car

A pre-owned vehicle that has been maintained well and often includes features of newer models, indicating low mileage and minimal wear.

Warranty

A guarantee provided by a seller or manufacturer concerning the condition of a product and the promise of repair or replacement within a specified period.