Question

The cost of one thing in terms of the alternative given up is known as ______.

• A. opportunity cost
• B. real cost
• C. actual cost
• D. deferred cost

Answer 1

The correct option is A opportunity cost

The cost of the next best alternative foregone is termed as opportunity cost. Opportunity cost, in terms of production of a commodity refers to the resources which the producer has to sacrifice in terms of the next best alternative which could have been produced using them, in order to produce every unit of the given commodity.