Question

Ed is taking off from work for 4 hrs. the afternoon and going to a baseball game. The ticket to the game cost $25 and it costs $15 to park at the stadium. Ed earns $15 an hour at this job. Ed's opportunity cost of going to the ball game is:
a. $100.
b. $25.
c. $60.
d. $50.

Answer 1

Answer:

The correct answer is option c.

Explanation:

The opportunity cost of a decision is the cost of sacrificing the second-best alternative. It is the indirect or implicit cost involved in a process.

The ticket to the game costs $25 and it costs $15 to park at the stadium.

Ed earns $15 an hour at this job.

He is taking off from work for 4 hrs. the afternoon and going to a baseball game.

The opportunity cost of going to the game will be equal to the wage he could have earned if he went to work instead of the game.

The opportunity cost

= $\ 15\ \times\ 4$

= $60