Here are three things you could do if you do not attend your economics class: watch television with some friends (you value this at $25), read a good book (you value this at $17), or go to work (you could earn $20 during the economics class). The opportunity cost of going to your economics class is:

a. $20, because this is the only alternative of the three where you actually receive a monetary payment.

b. $13, because this is the lowest valued alternative forfeited.

c. $25, because this is the highest valued alternative forfeited.

d. $58, because this is the total dollar sum of the alternatives forfeited

Question

Business

Selena Holmes

27 October, 11:48

Here are three things you could do if you do not attend your economics class: watch television with some friends (you value this at $25), read a good book (you value this at $17), or go to work (you could earn $20 during the economics class). The opportunity cost of going to your economics class is:

a. $20, because this is the only alternative of the three where you actually receive a monetary payment.

b. $13, because this is the lowest valued alternative forfeited.

c. $25, because this is the highest valued alternative forfeited.

d. $58, because this is the total dollar sum of the alternatives forfeited

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Answers (1)

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Nyasia Reyes · Answer 1

c. $25, because this is the highest valued alternative forfeited.

Explanation:

Opportunity cost is the value given up as a result of making a different choice. It is the value of the next best alternatives given up. Opportunity cost arises as a result of scarcity of resources. Economists analyze opportunity cost in attempts to find the best use of available resources.

Watching television is the next best alternative because it has the highest value at $25. The other options are viable, but the opportunity cost is the value of the next best choice. Best in the case implies the highest value missed.