The opportunity cost to a consumer who smokes cigarettes consists of the
A) costs imposed on others who inhale second-hand smoke.
B) products that the consumer could have bought instead of cigarettes.
C) amount of cigarette taxes paid by this consumer.
D) cost of complementary products such as lighters, ashtrays, and cigarette holders.

Question

Quizplus · Accepted Answer

The opportunity cost to a consumer who smokes cigarettes is the products that they could have bought instead of cigarettes. This is because the consumer has a limited budget, and every dollar spent on cigarettes is a dollar that could have been spent on other goods or services. The costs imposed on others who inhale second-hand smoke and the cost of complementary products are not opportunity costs to the consumer as they do not involve a trade-off of alternatives. The amount of cigarette taxes paid by the consumer may be considered an opportunity cost, but it is not as significant as the foregone alternative of using that money to purchase other products.

The Opportunity Cost to a Consumer Who Smokes Cigarettes Consists