4

Set 5: Central Ideas

Explanation

Answer: D

PASSAGE

The following text is about the concept of "opportunity cost." In economics, opportunity cost is the value of the next best alternative that is forgone when a choice is made. For example, if you spend a Saturday afternoon watching a movie, the opportunity cost is whatever else you could have done with that time, such as studying or working. Understanding opportunity cost helps individuals and businesses make better decisions by considering what they are giving up.

What does "opportunity cost" refer to in the text?

A. The monetary price of a movie ticket
B. The value of the alternative given up when making a choice
C. The total cost of running a business
D. The benefit gained from making a good decision✓ Correct

Detailed Explanation

Choice B is correct. The definition in the text is 'the value of the next best alternative that is forgone when a choice is made.'

Key Evidence:

• "value of the next best alternative"

• "what they are giving up"

Why others are wrong: A (Too specific (example only)), C (Inaccurate definition), D (Inaccurate definition).

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