Question

Suppose Mike has three hours of time to spend so he ranks the following activities in order of priority: (1) see a movie, (2) attend a ball game, (3) study economics. Assume that each activity takes three hours. What is Mike's opportunity cost of seeing the movie?

Answer 1

Mike's opportunity cost of seeing a movie is 2) Attend a ball game.

Step-by-step explanation:

Opportunity cost refers to the immediate loss when an option is chosen. Or what should have been chosen in it's place. In this case, the second best option(attending a ball game) is the opportunity cost.