Stephanie has decided to eat lunch between classes. She has ranked her choices, from highest to lowest as, (1) turkey sandwich, (2) tuna sandwich, (3) slice of cheese pizza, (4) cheeseburger. The opportunity cost of the eating turkey sandwich is
A) the combined value of the tuna sandwich, slice of cheese pizza and cheeseburger.
B) the value of tuna sandwich, the next best choice.
C) the value of the cheeseburger.
D) zero since she has satisfied a want.

Question

Quizplus · Accepted Answer

The opportunity cost of an item is the value of the next best alternative given up. Therefore, if Stephanie chooses to eat the turkey sandwich, the opportunity cost would be the value of the tuna sandwich (the next best choice). The value of the slice of cheese pizza and cheeseburger are not relevant to calculating the opportunity cost of choosing the turkey sandwich over the tuna sandwich. Therefore, the best choice for Stephanie would be the turkey sandwich since it is her highest ranked choice.

Stephanie Has Decided to Eat Lunch Between Classes