Mallory decides to spend 3 hours working overtime rather than watching a video with her friends. She earns $8 an hour. What is her opportunity cost of working?
A)the $24 she earns working
B)the $24 minus the enjoyment she would have received from watching the video
C)the enjoyment she would have received had she watched the video
D)nothing, since she would have received less than $24 of enjoyment from the video

Question

Quizplus · Accepted Answer

Opportunity cost is the benefit that is foregone by choosing one alternative over another. In this case, Mallory's opportunity cost of working is the enjoyment or utility she would have received from watching the video with her friends. So, the correct answer is C - the enjoyment she would have received had she watched the video.

Mallory Decides to Spend 3 Hours Working Overtime Rather Than