If we want to have more of one of the goods, we will have less of the other good. Thus, there is always a cost of having a little more of one good in terms of the amount of the other good that has to be forgone. What is this cost known as?

Option 1 -> Total Cost refers to the complete expense of producing a quantity of goods, not the trade-off between goods.

Option 2 -> Opportunity Cost is the value of the next best alternative forgone when making a choice between two goods.

Option 3 -> Marginal Cost is the additional cost of producing one more unit, not the trade-off between different goods.

Option 4 -> Average Cost is total cost divided by quantity, unrelated to the trade-off described.

Hence, Option 2: Opportunity Cost -> When resources are limited and we choose to produce more of one good, we must sacrifice some quantity of another good. This forgone quantity represents the opportunity cost. For example, if a farmer uses land to grow wheat instead of corn, the corn that could have been produced is the opportunity cost of growing wheat. This concept is fundamental to economics and is illustrated by the Production Possibility Frontier (PPF), which shows the trade-offs between two goods given scarce resources. -> correct