Question

Jen spends her afternoon at the beach, paying $1 to rent a beach umbrella and $11 for food and drinks rather than spending an equal amount of money to go to a movie. Her opportunity cost of going to the beach is:

Answer 1

The opportunity cost refers to the benefit that a consumer can get from the next best alternative. It can be measured in monetary as well as in non-monetary terms.

In our case, Jen have two choices, either go to the beach or to a movie.

So, the opportunity cost of going to a beach is the satisfaction that he could get from watching a movie.