Which of the Following Is True of an Opportunity Cost

question 155

Multiple Choice

Which of the following is true of an opportunity cost?

• A) It is the income foregone by not using a resource in an alternative way.
• B) The higher the opportunity costs, the lower is the relevant cost.
• C) It is recorded as an expense in the accounting records.
• D) It is an unavoidable cost that cannot be changed no matter what action is taken.

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Definitions:

Price Support Programs

Government initiatives designed to maintain the market price of a commodity or product at a minimum level to protect producers from market fluctuations.

Competitive Market

A market structure where many sellers are offering products or services that are similar, fostering high levels of competition.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers is equal to the quantity supplied by producers, resulting in market equilibrium.

Agricultural Product

Goods resulting from the cultivation of plants and rearing of animals intended for human use or consumption.