Question

Suppose a wedge of cheese is $10, and a loaf of bread is $5. The opportunity cost of purchasing a wedge of cheese is ________.

Option 1: the price of the bread
Option 2: the value of other potential purchases
Option 3: the total cost of both items
Option 4: the economic inflation rate

Answer 1

The opportunity cost of purchasing a wedge of cheese is the value of other potential purchases.

Step-by-step explanation:

The opportunity cost of purchasing a wedge of cheese is the value of other potential purchases. In this case, the opportunity cost of buying a wedge of cheese would be the value of potential purchases that could have been made with the $10 spent on the cheese. It is important to note that opportunity cost is the value of the next best alternative.