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) the Pepsi or the bag of chips, whichever the highest-valued alternative forgone.
C) the Mountain Dew.
D) the Pepsi because it is a drink, as is the Mountain Dew.
E) zero because he enjoys the Mountain Dew.

Question

Quizplus · Accepted Answer

Opportunity cost is the value of the highest valued alternative forgone. Therefore, the best choice is option B, which states that the opportunity cost is either the Pepsi or the bag of chips, whichever is the option with the higher value. Thus, Jamie had to give up one of these two options in order to purchase the Mountain Dew.

Jamie Has Enough Money to Buy Either a Mountain Dew,or