Question

An example of opportunity cost:

Answer 1

Answer: b. Is the Chinese food that you gave up when you chose to eat Italian food.

Explanation: Opportunity cost refers to the cost of the next best alternative foregone or sacrificed. When an individual chooses to take a certain action, then his opportunity cost of doing that will be the alternatives that he has foregone.

IT can be expresses as,

$Opportunity cost = \frac{Units sacrificed}{Units Gained}$

When the individual chooses Chinese food when he could have choose to eat Italian food, his opportunity cost will be the Chinese food that you gave up.

For other options there is no information on what was given up.