Question

You want to buy a new cell phone that costs $80 and two new video games that cost $40 each, but you don't have enough money saved for all of it.
Which of the following best describes the opportunity costs involved in your purchase decision?


A. If you buy a new cell phone, your opportunity cost is the money you spend to purchase the phone.

B. If you buy two new games, your opportunity cost is the money you spend to purchase the games.

C. If you buy a new cell phone, your opportunity cost is the time you could spend talking on the phone.

D. If you buy two new games, your opportunity cost is the time you could spend talking on the phone.

Answer 1

Answer:

D, If you buy two new games, your opportunity cost is the time you could spend talking on the phone.

Explanation Opportunity cost is the value of the next best thing you give up whenever you make a decision. In this case the opportunity cost of buying the two games is the time you could be using the phone.