Steve and Karen decide to attend the same concert when they are each given free tickets to it. We know that
A)both bear the same opportunity cost because they are seeing the same thing.
B)both bear the same opportunity cost because the tickets have the same face value.
C)both bear an opportunity cost that depends on what each person is giving up to attend the concert.
D)neither bears an opportunity cost since the tickets were given free to them.

Question

Quizplus · Accepted Answer

Opportunity cost is the value of the best alternative forgone, which means it depends on what each person is giving up to attend the concert. Even though they are seeing the same thing, the value of what they are giving up (time, money, other opportunities) may be different, thus resulting in different opportunity costs. The fact that the tickets were free does not remove the opportunity cost of attending the concert.

Steve and Karen Decide to Attend the Same Concert When