Asked by Kajal Barsiwal on Jul 08, 2024
Verified
The potential benefits lost by taking a specific action when two or more alternative choices are available is known as a(n) :
A) Alternative cost.
B) Sunk cost.
C) Out-of-pocket cost.
D) Differential cost.
E) Opportunity cost.
Opportunity Cost
The cost of forgoing the next best alternative when making a decision.
Alternative Choices
Different options or courses of action that can be taken in a decision-making process.
Sunk Cost
A cost that has already been incurred and cannot be recovered, regardless of future events.
- Understand the concept of opportunity cost and its significance in decision-making.
Verified Answer
CI
Chadrick IngramJul 11, 2024
Final Answer :
E
Explanation :
The potential benefits lost by taking a specific action when two or more alternative choices are available is known as an opportunity cost. It is important to consider opportunity cost when making decisions to ensure that we are making the most advantageous choice. It helps in evaluating the potential benefits of various options available and choosing the best one. Therefore, the best choice is to consider the opportunity cost while making any decision.
Learning Objectives
- Understand the concept of opportunity cost and its significance in decision-making.