The opportunity cost to a firm of using an asset is zero if
A) no money was spent to acquire the asset.
B) the asset has no alternative uses.
C) the asset was given to the firm for free.
D) the asset has zero sunk costs associated with it.
E) the asset is already owned by the firm.

Question

Quizplus · Accepted Answer

The opportunity cost of using an asset refers to the value of the best alternative use of the asset. If an asset has no alternative uses, then the opportunity cost of using it is zero. Therefore, choice B is correct. Choices A, C, D, and E do not guarantee that the opportunity cost is zero.

The Opportunity Cost to a Firm of Using an Asset