Question

You have the afternoon free. You have a choice between going to the movies with a friend or studying economics for three hours. If you go to the movies, you will spend $12.00 on a ticket and $4.75 on popcorn. If you choose to study economics for three hours, you will raise your exam grade by 15 points. Your opportunity cost of going to the movies is...

a. The $12.00 spent on the ticket but not the $4.75 spent on popcorn.
b. The $12.00 spent on the ticket and the $4.75 spent on popcorn.
c. The 15 points not earned on your exam grade.
d. The $12.00 spent on the ticket and the $4.75 spent on popcorn plus the 15 points on your exam grade.

Answer 1

The correct answer is c. The 15 points not earned on your exam grade.

Step-by-step explanation:

The cost of opportunity is the best alternative that you sacrifice when you choose an option.

It represent the benefits that you misses out on when choosing one alternative over another.

In this case if you go to the movies you sacrifices earning 15 points on your exam grade.