Jamie has enough money to buy either a Mountain Dew, or a Pepsi, or a bag of chips. He chooses to buy the Mountain Dew. The opportunity cost of the Mountain Dew is
A)the Pepsi and the bag of chips.
B)zero because he enjoys the Mountain Dew.
C)the Pepsi because it is a drink, as is the Mountain Dew.
D)the Mountain Dew.
E)the Pepsi or the bag of chips, whichever the highest-valued alternative forgone.

Question

Quizplus · Accepted Answer

The opportunity cost is the value of the next best alternative that is forgone. In this case, it's either the Pepsi or the bag of chips, whichever Jamie values more.

Jamie Has Enough Money to Buy Either a Mountain Dew