Which of the following phrases is synonymous with opportunity cost?

Opportunity cost refers to the value of the next best alternative that is foregone when making a decision. When you choose one option over another, the opportunity cost is essentially what you are giving up in order to pursue the chosen option.

The phrase "trade-off" captures this concept effectively because it involves understanding the sacrifices made for one option over another. Whenever a choice is made, there is always a trade-off between different options, reflecting the idea that the resources used in one area (such as time, money, or effort) could have been employed in another potentially beneficial manner. Hence, it signifies the core essence of opportunity cost perfectly.

Other terms such as margin cost, net gain, and initial investment do not encapsulate the idea of opportunity cost in the same way. Margin cost relates to the cost of producing one additional unit of a good or service, net gain refers to the overall profit after all expenses, and initial investment pertains to the amount of money spent to acquire an asset or to start a project. None of these terms directly convey the concept of what is sacrificed when opting for one choice over another, which is why "trade-off" is the most appropriate synonym for opportunity cost.