Which of the following activities describes the opportunity cost of watching a play in a theater?
A) the value of the time it takes to get to the play by car
B) the cost of the ticket to the play
C) the value of the highest valued alternative that must be forgone because of the time and money required to watch the play
D) the cost of gasoline used in driving to the play

Question

Quizplus · Accepted Answer

Opportunity cost is the cost of the best alternative forgone. In this case, the opportunity cost of watching a play in a theater is the value of the highest valued alternative that must be forgone because of the time and money required to watch the play. This could be any number of things, such as attending a different event or activity, working, or even just relaxing at home. The cost of the ticket or the cost of getting to the play are not the opportunity cost, as they are direct costs and not alternative costs. The cost of gasoline used in driving to the play is also not the opportunity cost, as it is only one part of the direct cost of getting to the play.

Which of the Following Activities Describes the Opportunity Cost of Watching