Question

Monica paid $12 for a music CD for which she later was offered $15. After that someone offered her $18 for the CD. If Monica keeps the CD, the amount of her opportunity cost is $33.a. Trueb. False

Answer 1

Answer:

False

Explanation:

The opportunity cost refers to the benefit that is foregone by choosing some other alternative. It is measurable in monetary terms as well as in non-monetary terms.

In our case,

Monica paid for CD = $12

Hence, she already paid for the CD, so here the opportunity cost is either she keep the CD or she not keep the CD for the amount of $18.

Hence, if Monica decided to keep the CD then the opportunity cost of keeping the CD is $18.