Question

Cameron loves computer accessories, and he has a $40 gift card to Best Buy. He can spend his gift card to get either a new keyboard or speakers for his computer. He values the keyboard at $50 and the speakers at $55. What is the opportunity cost of buying the keyboard?

Answer 1

Answer:

$55

Explanation:

Opportunity cost refers to the value of benefit forgone, in order to get the benefit of current option chosen.

Here, Cameron has a gift card worth $40 which he had to use,

Now he had two options:

Either to buy keyboard of $50

or

To buy speakers costing $55

He chooses to buy keyboard and the value of benefit forgone is value of speakers = $55.

Thus, opportunity cost = $55