Fred and Ann are both given free tickets to see a movie. Both decide to see the same movie. We know that
A) both bear an opportunity cost of seeing the movie because they could have done other things instead of seeing the movie.
B) both bear the same opportunity cost of seeing the movie because they are doing the same thing.
C) it is not possible to calculate the opportunity cost of seeing the movie because the tickets were free.
D) the opportunity cost of seeing the movie is zero because the tickets were free.

Question

Quizplus · Accepted Answer

Opportunity cost refers to the value of the next best alternative foregone by choosing a particular action. Even though the movie tickets were free, Fred and Ann still bear an opportunity cost for seeing the movie because they could have used their time to do something else. The concept of opportunity cost includes not just financial costs but also time and other resources.

Fred and Ann Are Both Given Free Tickets to See