Asked by Kirstyn Alston on May 14, 2024
Verified
The opportunity cost of an activity:
A) depends on an individual's subjective values and opinions.
B) is the same for everyone.
C) must be calculated and known before undertaking that activity.
D) is irrelevant to decision making.
E) is not related to time.
Opportunity Cost
The cost of what is forgone in order to pursue a certain action; the value of the best alternative option that is not selected.
Subjective Values
The notion that the value of goods and services is determined by the preferences and perceptions of individuals, rather than by intrinsic characteristics.
Decision Making
The process of selecting among available alternatives based on the preferences and values of the decision-maker.
- Comprehend the principle of opportunity cost and the methods used for its calculation.
- Recognize the elements that affect opportunity cost and its significance in the process of making decisions.
Verified Answer
MB
Mekdese BekeleMay 16, 2024
Final Answer :
A
Explanation :
The opportunity cost of an activity is subjective and varies from person to person based on their values, preferences, and the alternatives they are considering. It reflects the value of the best alternative forgone when a choice is made.
Learning Objectives
- Comprehend the principle of opportunity cost and the methods used for its calculation.
- Recognize the elements that affect opportunity cost and its significance in the process of making decisions.