Which of the following best describes the concept of opportunity cost in economics?

• A. The value of the next best alternative forgone when making a choice
• B. The profit earned from selling goods in a market
• C. The total amount of resources used in production
• D. The monetary cost of purchasing a good or service

Answer: (A)

Verified step by step guidance

1. Understand that opportunity cost is a fundamental concept in economics that refers to the value of the next best alternative that must be given up when making a choice.
2. Recognize that opportunity cost is not simply the monetary cost or the total resources used, but rather what you sacrifice in terms of the next best option available.
3. Compare the given options by identifying which one captures the essence of giving up an alternative when a decision is made.
4. Eliminate options that refer to profit, total resources, or monetary cost alone, as these do not fully capture the idea of opportunity cost.
5. Conclude that the best description is 'The value of the next best alternative forgone when making a choice' because it directly reflects the trade-off involved in economic decisions.