Suppose you take a trip during Spring Break.To determine the benefit of taking the trip,you
A) calculate the opportunity cost of the trip.
B) measure what you are willing to give up to take the trip.
C) determine the sunk cost of taking the trip.
D) calculate the value of the next best alternative foregone.
E) must measure what the trip is worth to you and then subtract the cost of the trip.

Question

Quizplus · Accepted Answer

To determine the benefit of taking the trip, you need to measure what you are willing to give up to take the trip. This is the opportunity cost, which is the best alternative foregone. Option A is similar to option D, but they both miss the idea of measuring what you are willing to give up. Option C refers to costs that cannot be avoided, whereas the benefit is what you gain from the trip. Finally, option E is a bit misleading because you do not subtract the cost from what the trip is worth to you, but rather from what you are willing to forego.

Suppose You Take a Trip During Spring Break