The government has been considering doing away with minting pennies because they are rarely used for purchases (with most people collecting them or throwing them away).How would an economist best explain this?
A) More people are using credit and debit cards, so they are not in the habit of using monetary change.
B) Prices have increased over time, and it would take far too many pennies to buy anything of value.
C) Prices have increased over time, and the opportunity cost of carrying around large quantities of pennies has become too large.
D) Prices have increased over time, and the opportunity cost of carrying around pennies has fallen.
E) People who use pennies probably aren't spending enough money; removing the penny will force people to spend more.

Question

Quizplus · Accepted Answer

As prices have increased over time, the opportunity cost of carrying around large quantities of pennies has become too large. It becomes impractical to carry around a significant amount of low-value coins such as pennies, as the weight and bulkiness of them outweigh their perceived value. Therefore, many people either collect pennies, throw them away, or leave them behind in tip jars or donation boxes, making the minting of new pennies largely unnecessary.

The Government Has Been Considering Doing Away with Minting Pennies