Suppose there are three alternatives to attending a social event: read a novel (you value this at $10), go to work (you could earn $20), or watch videos with some friends (you value this at $25). The opportunity cost of attending the social event is
A)$45.
B)$20.
C)$10.
D)zero.
E)$25.

Question

Quizplus · Accepted Answer

The opportunity cost is the value of the next best alternative foregone. Here, the highest valued alternative to the social event is watching videos with friends, valued at $25.

Suppose There Are Three Alternatives to Attending a Social Event