Question

Tim woke up this morning with a stomachache and decided to skip class in order to get more rest. What is the opportunity cost of Tim's decision to sleep in?

a) the improvement in how he feels by getting more rest
b) the actual enjoyment of lying in bed instead of sitting in class
c) the value of attending the class he decided to miss
d) the level of pain he endured from the stomachache

Answer 1

Answer: C - the value of attending the class he decided to miss

Explanation: Opportunity costs are best defined in values of forgone alternatives. It is the cost gotten for not picking another available option. Waking up with a stomach ache and going to class are the two options Tom has, by deciding to stay at home Tom has sacrificed being at school and learning. That sacrificed value is the opportunity cost for staying at home. Therefore the answer is C and not the rest of the other options.

Answer 2

The correct answer is letter "C": the value of attending the class he decided to miss.

Step-by-step explanation:

Opportunity cost reflects the benefit of the option chosen -out of different variables- compared to the benefit that could have been obtained if another option was taken. It is the return of the option taken in reference to the option forgone. Opportunity cost could be positive or negative.

In Tim's case, as he decides to stay at home because of his stomachache, he will be missing class. Thus, the class missed is Tim's opportunity cost over sleeping in.