_______________ is the value of the best alternative given up when a choice is made.

• A. Explicit cost
• B. Sunk cost
• C. Marginal benefit
• D. Opportunity cost

Answer: (D)

Verified step by step guidance

1. Understand the concept of opportunity cost: it represents the value of the next best alternative that must be forgone when making a decision.
2. Recognize that explicit costs are actual out-of-pocket expenses, which differ from opportunity costs because opportunity costs include both explicit and implicit costs.
3. Identify that sunk costs are past costs that cannot be recovered and should not affect current decision-making, so they are not opportunity costs.
4. Note that marginal benefit refers to the additional benefit received from consuming one more unit of a good or service, which is different from opportunity cost.
5. Conclude that the term describing the value of the best alternative given up when a choice is made is 'opportunity cost'.