You go to the movieplex where movies ordinarily cost $8.00. You are intending to see a movie for which you have a $2.50-off coupon good for only that movie at that time. However, when you get there you see a friend who asks if you would rather see a new release. Both movies start and end at the same time. If you decide to see the new release with your friend, what is your opportunity cost?

Question

Quizplus · Accepted Answer

The opportunity cost includes the value of the next best alternative foregone, which in this case is the value you place on the first movie plus the $2.50 you would have saved with the coupon.

You Go to the Movieplex Where Movies Ordinarily Cost $8