Dana, who is a trained yoga instructor, spends 4 hours on Monday baking and packing 10 boxes of cookies. She sells the cookies for $10 a box. Given that she can also teach yoga for $80 an hour, what is her opportunity cost of baking cookies?
A) $320
B) $100
C) $220
D) $420
E) $800

Question

Quizplus · Accepted Answer

Dana's opportunity cost of baking cookies is the income she foregoes by not teaching yoga. Since she could earn $80 per hour teaching yoga and spends 4 hours baking cookies, her opportunity cost is 4 hours * $80/hour = $320.

Dana, Who Is a Trained Yoga Instructor, Spends 4 Hours