Which of the Following Statements Regarding "Opportunity Costs" Is True

question 76

Multiple Choice

Which of the following statements regarding "opportunity costs" is true?

• A) These costs are recorded routinely by most modern cost accounting systems.
• B) These costs relate to the benefit lost or foregone when a chosen option (course of action) precludes the benefits of an alternative option from being realized.
• C) These costs are generally deductible for federal income tax purposes in the U.S.
• D) In terms of most short-run decisions, they are irrelevant.
• E) They are usually considered a sunk cost associated with one or more decision alternatives.

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Definitions:

Define GDP

Gross Domestic Product (GDP) represents the overall market or monetary value of all finished goods and services produced inside a nation's boundaries over a certain period.

Capital Equipment

Long-term assets, such as machinery and buildings, used in the production of goods and services.

Investment

Allocation of resources, such as capital, to assets that are expected to generate returns over time.

GDP

Gross Domestic Product, a monetary measure of the market value of all the final goods and services produced in a specific time period, often used as an indicator of a country's economic health.