During the next hour John can choose one of the following three activities: playing basketball, watching television, or reading a book. The opportunity cost of reading a book
A)depends on how much the book cost when it was purchased.
B)is the value of playing basketball if John prefers that to watching television.
C)is the value of playing basketball and the value of watching television.
D)depends on how much John enjoys the book.
E)is the value of watching television if John prefers playing basketball to watching television.

Question

Quizplus · Accepted Answer

The opportunity cost of an activity is the value of the next best alternative that is foregone. If John prefers playing basketball to watching television, then the opportunity cost of reading a book is the value of playing basketball, as it is the next best alternative.

During the Next Hour John Can Choose One of the Following