Economics 11th Edition by William McEachern

Exercise 13

OPPORTUNITY COST Determine whether each of the following statements is true, false, or uncertain. Explain your answers:
a. The opportunity cost of an activity is the total value of all the alternatives passed up.
b. Opportunity cost is an objective measure of cost.
c. When making choices, people carefully gather all available information about the costs and benefits of alternative choices.
d. A decision maker seldom knows the actual value of a forgone alternative and therefore must make decisions based on expected values.