You have the option of consuming one cup of coffee or two donuts or three oranges. You picked the cup of coffee. Therefore the opportunity cost of this cup of coffee is
A)the price of the cup of coffee.
B)the difference in the prices of these three products.
C)the price of the donuts as they are usually consumed with coffee.
D)either the donuts or the oranges, whichever you like more.

Question

Quizplus · Accepted Answer

The opportunity cost is the value of the next best alternative foregone. Since you chose the coffee, the opportunity cost is the value of either the donuts or the oranges, depending on which you value more.

You Have the Option of Consuming One Cup of Coffee