Jamie has enough money to buy either a Mountain Dew, a Pepsi, or a bag of chips. He chooses to buy the Mountain Dew. The opportunity cost of the Mountain Dew is
A) the Mountain Dew.
B) the Pepsi and the bag of chips.
C) the Pepsi or the bag of chips, whichever is the highest-valued alternative forgone.
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

The opportunity cost of a choice is the highest-valued alternative forgone, in this case, the Pepsi or the bag of chips. So the best choice is to choose C as the answer.

Jamie Has Enough Money to Buy Either a Mountain Dew