Opportunity cost is the value of the forgone next best alternative.

Steps:

• Define opportunity cost as the benefit lost from choosing one option over others.
• Identify the scenario: spending $20 on shoes means forgoing other purchases with that money.
• Evaluate choices: focus on what the $20 could alternatively buy, not unrelated costs.
• Select the option matching the next best use of the funds.

Why D is correct:

• Opportunity cost is defined in economics as the value of the next best alternative forgone when a decision is made.

Why the others are wrong:

• A: Too broad; opportunity cost specifies the single next best option, not everything possible.
• B: Relates to transaction costs, not the core forgone benefit of the expenditure.
• C: Involves sunk costs from past purchases, irrelevant to the current spending decision.

Final answer: D