You rent a copy of a new action/adventure movie. The rental is for seven days and you watch the movie on the first day. You tell a friend about the film and your friend asks to come over and watch the movie with you before it is due back. What is your opportunity cost of watching the movie a second time?

Question

Quizplus · Accepted Answer

Opportunity cost refers to the value of the best alternative forgone. In this case, the opportunity cost of watching the movie a second time would depend on what else you could do with that time. If there are other enjoyable activities you could do with your friend, such as going out to a movie theater or playing a game, then the opportunity cost of re-watching the movie would be higher. If, however, there are no other plans and you still enjoy the movie, then the opportunity cost may be lower. The rental cost and your liking of the movie are not relevant in determining the opportunity cost.

You Rent a Copy of a New Action/adventure Movie