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WAEC Economics 1993 Question 3

Question 3

Basic Concepts

The real cost of a commodity is

  1. A.the cost of the alternative that has to be sacrificed for it
  2. B.the alternative that has to be forgone in order to purchase it
  3. C.its market price
  4. D.the alternative cost involved when the opportunity of buying the commodity is missed
  5. E.the sacrifice that is made after buying the commodity.
Show the answer and explanation

Answer: B (the alternative that has to be forgone in order to purchase it)

Explanation

Real (opportunity) cost is the next best alternative given up to obtain the commodity.