Jessica, aged three, decides to dress up like Sleeping Beauty for Halloween. What is her opportunity cost of this decision?

Question

Quizplus · Accepted Answer

The opportunity cost of Jessica's decision to dress up like Sleeping Beauty is the fact that she cannot dress up like her second choice, which is Barbie. This is because opportunity cost is the value of the next best alternative that is foregone in order to pursue a certain action. Since Jessica has chosen to dress up like Sleeping Beauty, she cannot dress up like Barbie, which was her second choice. Therefore, the opportunity cost of her decision is the enjoyment or satisfaction that she would have derived from dressing up like Barbie.

Jessica, Aged Three, Decides to Dress Up Like Sleeping Beauty