Question

Melody decides to spend 3 hours working overtime rather than going to the park with her friends. She earns $20 per hour for overtime work Her opportunity cost of working is

Answer 1

Answer:

C) the enjoyment she would have received had she gone to the park.

Explanation:

Opportunity costs are the costs (or benefits lost) from choosing one activity (or investment) over another activity (or investment).

Since our resources are scarce, and time is one of the most scarce resources, we cannot do two completely different things at the same time. Melody has to choose between going to the park or going to work. If she decides to go to the park, her opportunity cost will be the money she could have earned working. But since she decided to go to work, her opportunity cost is the enjoyment she could have received by spending time on the park.