Question

The five-dollar Burger Joint gift card that your friend gave you for your birthday expires today. You can either use the gift card to buy yourself dinner at Burger Joint, or you can stay home and eat a delicious home-cooked meal. What is the opportunity cost of eating the home-cooked meal?

Answer 1

Answer:

Opportunity cost is the benefit that is foregone for an individual by choosing one alternative over other alternatives available to him.

If the opportunity cost is lower for an individual then this will benefit him whereas if the opportunity cost is higher then this will not benefit the individuals.

We know that if a person stay at home and eat delicious home-cooked then he must use some ingredients to cook food.

Therefore, the opportunity cost of eating the home-cooked meal is five-dollar Burger Joint gift card and the value of ingredients that are use in the home-cooked food.