Opportunity Cost Measures Forgone Benefits

Steps:

• Define opportunity cost as the value of the next best alternative forgone when making a choice.
• Identify that it focuses on benefits lost, not direct financial costs.
• Compare choices to the question: evaluate each option against this definition.
• Select the option that precisely captures the forgone benefits of the alternative.

Why B is correct:

• Opportunity cost is defined in economics as the benefits you give up by choosing one option over the next best alternative, directly matching B's wording.

Why the others are wrong:

• A: This describes comparative benefits but not the cost of forgoing them.
• C: This vaguely mentions costs without specifying forgone benefits or alternatives.
• D: This limits to financial costs, ignoring non-monetary benefits lost.

Final answer: B