Maria spends her afternoon at the beach, paying $2 to rent a beach umbrella and $10 for food and drinks rather than spending an equal amount of money to go to a movie. The opportunity cost of going to the beach is:
A) zero, because she got food, drinks, and an umbrella in return for the money.
B) the $12 she spent on the umbrella, food, and drinks.
C) only $2 because she would have spent the money on food, and drinks whether or not she went to the beach.
D) the movie she missed seeing plus the $12 she spent on the umbrella, food and drinks.

Question

Quizplus · Accepted Answer

The opportunity cost includes both the actual money spent ($12) and the value of the next best alternative foregone, which in this case is the movie she missed seeing.

Maria Spends Her Afternoon at the Beach, Paying $2 to Rent