The opportunity cost of producing good A is defined to be
A)the cost of having to get by using something else in place of good A.
B)the money cost of the factors of production used in good A.
C)what must be sacrificed of other goods to get an additional unit of good A.
D)the cheapest method of producing good A.
E)the retail price of good A.

Question

Quizplus · Accepted Answer

Opportunity cost is the sacrifice of other goods that must be made to obtain an additional unit of a particular good. Therefore, option C is the correct definition of opportunity cost. Option A is not specific, and it does not consider the sacrifice of other goods. Option B refers to the cost of factors of production, not opportunity cost. Option D refers to the production method, not opportunity cost. Option E refers to the retail price, which is not related to opportunity cost.

The Opportunity Cost of Producing Good a Is Defined to Be