Which one of the following is the opportunity cost of a chosen activit

Which one of the following is the opportunity cost of a chosen activity ?

[amp_mcq option1=”Out of pocket cost” option2=”Out of pocket cost plus cost incurred by the Government” option3=”Value of all opportunities forgone” option4=”Value of next best alternative that is given up” correct=”option4″]

This question was previously asked in

UPSC CDS-2 – 2021

Download PDF Attempt Online

Opportunity cost is the value of the next best alternative that must be forgone to pursue a certain action. It represents the benefits you could have received by taking an alternative action. When you choose one activity, you give up the opportunity to engage in other activities; the opportunity cost is the value of the single best option you did not choose.

Opportunity cost is the value of the next best alternative foregone.

It is distinct from explicit or ‘out-of-pocket’ costs (accounting costs). Economic decision-making often considers both explicit and implicit (opportunity) costs. For example, the opportunity cost of attending college includes not only tuition and books (explicit costs) but also the income you could have earned if you had worked instead of studying (implicit cost).

More similar MCQ questions for Exam preparation:-