The opportunity cost of an airplane flight:
A)differs across passengers only to the extent that each traveler pays a different airfare.
B)is identical for all passengers and equal to the number of hours a particular flight takes.
C)differs across passengers to the extent that both the airfare paid and the highest valued use of travel time vary.
D)is equal to the cost of traveling by bus, the next best alternative to flying.
E)differs across passengers because of the differences in the paying capacities of passengers.

Question

Quizplus · Accepted Answer

Opportunity cost refers to the value of the next best alternative foregone. In the case of an airplane flight, the opportunity cost differs across passengers because each passenger has a different highest valued use of their travel time, in addition to paying a different airfare. For example, a business traveler may have a higher opportunity cost than a leisure traveler who has more flexibility with their time. Therefore, choice C is the best answer.

The Opportunity Cost of an Airplane Flight