An economy has to choose one of the many possibilities that it has at given resources. Therefore, the cost of an additional unit of X commodity in terms of the amount of the Y commodity that has to be forgone is called _____ cost.

Opportunity

The correct answer is Option (1) → Opportunity

When an economy uses its limited resources to produce more of one good (X), it must reduce the production of another good (Y). The cost of producing one additional unit of X in terms of the amount of Y forgone is known as opportunity cost. This concept is central to the study of economics and is graphically represented by the Production Possibility Curve (PPC).