Question

In the 2 hours between classes a student can do one of three things, ranking them from most to least desirable as: (1) chat with friends, (2) study economics, or (3) eat lunch. This student's opportunity cost of chatting with friends is___________.

Answer 1

The correct answer is: study economics.

Step-by-step explanation:

Opportunity cost is defined as the return of the option taken over the return of the option forgone. It is also described as the return of the best next option of the decision taken. In some cases the opportunity cost can be positive -a good result for the individual taking the decision- or negative.

Thus, the student opportunity cost of chatting with friends represents the return he could have obtained from his or her best next available option which is studying economics.