Question

You can spend $100 on either a new economics textbook or a new CD player. If you choose to buy the new economics textbook, the opportunity cost is:A)$100.B)your enjoyment of the new CD player.C)both the $100 and the your enjoyment of the new CD player.D)impossible to

Answer 1

Answer: Option (B) is correct.

Explanation:

Given that,

Cost of new economics textbook = $100

Cost of new CD player = $100

Opportunity cost is the benefit that is foregone for an individual by choosing one alternative over other alternatives available to him.

If the opportunity cost is lower for an individual then this will benefit him whereas if the opportunity cost is higher then this will not benefit the individuals.

As the cost of both the products are identical, so the opportunity cost of buying new economics textbook is the enjoyment of the new CD player.