Jimmy is very excited about the costume party with a 1990s theme.He is planning to dress up as MC Hammer but is also considering going as a lifeguard from Baywatch.His opportunity cost of arriving dressed like MC Hammer is:

Question

Quizplus · Accepted Answer

The opportunity cost is the value of the next best alternative that must be forgone as a result of choosing a certain action. In this case, if Jimmy chooses to dress up as MC Hammer, he gives up the opportunity to dress up as a lifeguard from Baywatch. Therefore, the opportunity cost of arriving dressed like MC Hammer is giving up the alternative of dressing like a lifeguard. The cost of parachute pants and savings from not purchasing red swimming trunks are not opportunity costs as they do not involve giving up an alternative choice.

Jimmy Is Very Excited About the Costume Party with a 1990s