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The opportunity cost of an activity refers to the:
The opportunity cost of an activity refers to the: A) amount of money the activity costs
B) expected gains minus the expected costs of engaging in the activity.
C) expected gains of engaging in the activity
D) next best thing that must be sacrificed in order to engage in the activity.
Final answer:The opportunity cost of an activity is the value of the next best alternative that is given up to engage in that activity, which corresponds to answer option D.Explanation:The opportunity cost of an activity refers to the value of the next best alternative that must be forgone in order to pursue the current activity. Thus, the correct answer is D) the next best thing that must be sacrificed in order to engage in the activity. This concept is essential in both personal decision-making and in the field of economics, where it is used to assess the cost of forgoing the most valuable alternative when a choice is made.For example, if a country decides to specialize in the production of coffee, the opportunity cost is the cocoa production that it could have pursued. The opportunity cost includes the benefits one could have received from the alternative choice, which in many cases is not easily quantifiable. It is the measure of what is given up by choosing one option over another, and it varies from person to person based on individual values and preferences....