The expression of cost in terms of alternative forgone is referred to as ____?

Step 1: Analyze the question The question asks for the term used when cost is expressed in terms of the alternative you give up (forgone) in order to get something else.

Step 2: Explain the concept Resources are scarce, but human wants are unlimited. Because of this, we must choose. Every choice means giving up something else. The value of the next best alternative given up is called opportunity cost.

Step 3: Examine the options

• A. Scarce resources: This describes limited means of production. It is the cause of the problem, not the cost expressed as a forgone alternative.
• B. Decision making: This is the process of choosing, not the cost of choosing.
• C. Opportunity cost: This is the cost of a choice measured by the next best alternative forgone. It matches the definition exactly.
• D. Choice: This is the act of selecting between alternatives. It is not the cost of that selection.

Step 4: Example Suppose a student spends ₦5,000 on a textbook instead of a pair of shoes. The opportunity cost of the textbook is the pair of shoes (the next best use of that money), not the ₦5,000 itself.

Answer: C. Opportunity cost

Exam tip: Whenever you see the phrases "alternative forgone," "next best alternative," or "what you give up," think opportunity cost. Also remember the chain: scarcity → choice → scale of preference → opportunity cost.