Tommy spends most of his monthly budget on $3 video game rentals or $6 packets of Pokemon cards.The opportunity cost to Tommy of an extra packet of Pokemon cards is
A)one video game rental.
B)two video game rentals.
C)the cost of the Pokemon cards.
D)he does not incur an opportunity cost.

Question

Quizplus · Accepted Answer

The opportunity cost of an extra packet of Pokemon cards for Tommy is what he must give up to obtain it. Since a packet of Pokemon cards costs $6 and a video game rental costs $3, Tommy could afford two video game rentals for the price of one packet of Pokemon cards. Therefore, the opportunity cost of an extra packet of Pokemon cards is two video game rentals.

Tommy Spends Most of His Monthly Budget on $3 Video