Stephen spends an hour studying instead of playing soccer with his friends. What is the opportunity cost to him of studying?
A) the improvement in his grades from studying for the hour
B) the difference between the improvement in his grades from studying minus the enjoyment of playing soccer
C) the enjoyment and exercise he would have received had he played soccer
D) nothing, because Stephen chose to study rather than to play soccer so the value of studying must have been greater than the value of playing soccer

Question

Quizplus · Accepted Answer

Opportunity cost refers to the next best alternative that is given up when making a choice. In this case, Stephen gave up playing soccer with his friends in order to study. Therefore, the opportunity cost to him of studying is the enjoyment and exercise he would have received had he played soccer. A is incorrect because it only considers the benefits of studying and not what was given up. B is incorrect because it incorrectly calculates the opportunity cost by subtracting the enjoyment of playing soccer from the improvement in his grades from studying. D is incorrect because it assumes that the value of studying was greater than the value of playing soccer, but this is not necessarily true as it is subjective and depends on individual preferences.

Stephen Spends an Hour Studying Instead of Playing Soccer with His