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Fact 1.3.2 Cost of Sochi Winter Olympics
The Russian government spent $6.7 billion on Olympic facilities and $16.7 billion upgrading Sochi area infrastructure. Sponsors spent $27.6 billion on hotels and facilities hoping to turn Sochi into a year-round tourist magnet.
Source: The Washington Post, February 11, 2014
-Refer to Fact 1.3.2. The opportunity cost of the Sochi Olympics was
A)$51 billion because the Russian government would have spent this money anyway to revitalize Sochi.
B)$6.7 billion because that was the cost of the Olympic facilities.
C)$51 billion if the Russian government would not have spent this money had the Olympics not been held in Sochi.
D)$23.4 billion because spending on hotels and facilities of $27.6 billion was unnecessary.
E)zero because the Russian government competed with other countries to host the Olympics.

Question

Quizplus · Accepted Answer

The opportunity cost of the Sochi Olympics is the cost of the next best alternative that was given up, which in this case is the $51 billion that the Russian government spent on Olympic facilities and upgrading Sochi area infrastructure that they may not have spent if the Olympics were not held in Sochi. Therefore, the correct answer is C.

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