One way to measure the opportunity cost of an hour of leisure is:
A)the wage rate that an individual could earn for that hour.
B)the cost of going to a restaurant every evening to eat.
C)the cost of visiting a museum just for fun.
D)the cost of the cleaning service that I hire to clean my house because I work 50 hours per week.

Question

Quizplus · Accepted Answer

The opportunity cost of an hour of leisure is best measured by the wage rate that an individual could earn for that hour. This is because by choosing leisure, one is giving up the opportunity to earn money during that same hour. Therefore, the cost of the leisure time is equal to the amount of money that could have been earned during that hour. The opportunity cost of an hour of leisure is the value of the next best alternative that an individual could have pursued instead of leisure. The wage rate that an individual could earn for that hour represents the value of the foregone income that could have been earned by working during that hour. Therefore, option A is the best choice.

One Way to Measure the Opportunity Cost of an Hour