Mallory decides to spend three hours working overtime rather than watching Netflix with her friends.She earns $9 an hour.What is her opportunity cost of working
A)the $27 she earns working
B)the $27 minus the enjoyment she would have received from watching Netflix
C)the enjoyment she would have received had she watched Netflix
D)nothing, because she would have received less than $27 of enjoyment from Netflix

Question

Quizplus · Accepted Answer

Opportunity cost refers to the value of the next best alternative foregone. In this case, Mallory's next best alternative was watching Netflix with her friends. Therefore, her opportunity cost of working is the enjoyment she would have received from watching Netflix. Option A is not the correct choice because it only includes the amount Mallory earned and not the value of what she gave up. Option B includes the correct opportunity cost, but it subtracts it from the amount she earned, which is not necessary. Option D is not correct because the enjoyment she would have received from Netflix is a valid opportunity cost, regardless of its monetary value.

Mallory Decides to Spend Three Hours Working Overtime Rather Than