Amy can study for an hour or spend that hour sleeping or going out for dinner.If she decides to study for the hour,the opportunity cost of the hour spent studying is
A) definitely going to sleep.
B) studying since this is the choice she opted for.
C) sleeping or going out for dinner, whichever she would have preferred the most.
D) sleeping and going out for dinner.
E) definitely going out to dinner because she must eat at some time.

Question

Quizplus · Accepted Answer

The opportunity cost of studying is the value of the next best alternative that is foregone as a result of the decision. In this case, the next best alternatives are sleeping or going out for dinner. The opportunity cost is not the choice that was made (studying), but rather the value of what was given up (in this case, sleeping or going out for dinner). Therefore, the correct answer is C.

Amy Can Study for an Hour or Spend That Hour