Which statement about opportunity cost is true?

Question

Every ordinary decision we make involves an opportunity cost.

It is the least desirable alternative given up as the result of a decision.

Every decision has at least two opportunity costs.

When making a decision, every trade-off is an opportunity cost.

Answer 1

The true statement about opportunity cost is:

"It is the least desirable alternative given up as the result of a decision."

Opportunity cost refers to the value of the next best alternative that is forgone when a decision is made. While it's correct that every decision can involve opportunity costs, not every ordinary decision creates multiple opportunity costs, and not every trade-off counts as an opportunity cost. The key aspect is that it specifically refers to the next best alternative that has been sacrificed.