Mikki decides to work five hours the night before her economics exam. She earns an extra $75, but her exam score is 10 points lower than it would have been had she stayed home and studied. Her opportunity cost is the:

Question

Quizplus · Accepted Answer

The opportunity cost of Mikki's decision is the next best alternative she gave up, which in this case is the 10 points on her econ exam. The five hours she worked and the $75 she earned are benefits she received from her decision, not opportunity costs. The time she could have spent watching television and any guilt she may feel are not relevant to the decision and do not represent opportunity costs.

Mikki Decides to Work Five Hours the Night Before Her