Multiple Choice
Opportunity costs can be viewed in terms of:
0. Basic Principles of Economics
Scarcity and Choice
Multiple Choice
The potential benefit given up when selecting one alternative over another is a(n) ______ cost.
A
explicit
B
opportunity
C
fixed
D
sunk
Verified step by step guidance1
Understand the concept of different types of costs in microeconomics: explicit costs, fixed costs, sunk costs, and opportunity costs.
Explicit costs are direct, out-of-pocket payments for resources used in production, such as wages or rent.
Fixed costs are costs that do not change with the level of output, like rent or salaries that must be paid regardless of production.
Sunk costs are costs that have already been incurred and cannot be recovered.
Opportunity cost is the value of the next best alternative foregone when making a decision, representing the potential benefit given up.
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