What do you understand by the term “Opportunity cost”?

The correct answer is option 4: Cost which we forgo, while making a choice or a decision

Opportunity cost refers to the value which we forgo while taking a decision.

For example: Kanica decides to skip the marriage so that she can study for her economics class test. Thus, when she took the decision of not going to the marriage, it becomes her opportunity cost.

Another example can be - Raju has 10,00,000 in his hand and has a choice whether he can invest that money in mutual funds or can use it in his wedding. Now, whatever the decision he takes, the 2^nd best alternative value will be his opportunity cost.