Question

1. Understanding opportunity costYou work as an assistant coach on the university basketball team and earn $15 per hour. One day, you decide to skip the hour-long practice and, instead, go to the local carnival, which has an admission fee of $9.The total cost (valued in dollars) of skipping practice and going to the carnival (including the opportunity cost of time) is .A.$6 B.$9 C.$15 D.$24

Answer 1

Answer:

The correct answer is letter "D": $24.

Explanation:

Opportunity cost can be defined as the cost of the best next available option after taking another decision in regards to a situation. It is also the return that the chosen option provides compared to the return that could have provided the option that was forgone.

In this case, choosing to go to the local carnival will represent losing one hour of working as a coach assistant ($15). Besides, as there is a $9 admission fee to the carnival, you will need to spend that money. Thus, the total opportunity cost of going to the carnival instead of working is $24 ($15+$9=$24).