Question

You order a $40 Andy Warhol print online for a Christmas gift. There’s a standard shipping charge of $10, but you see that orders of $45 or more ship for free. You could also order a $5 pair of socks, but you’re not sure the gift recipient would like them. Nonetheless, you decide to order the socks. Your decision is an example of:________.
a. marginal thinking.
b. trade-offs.
c. opportunity costs.
d. incentives.

Answer 1

Answer:

c. opportunity costs.

Explanation:

Opportunity cost is the cost that a person face for choosing an alternative and loosing benefit from other options. The benefit foregone for choosing an alternative is opportunity cost.

in this question there is an opportunity cost of $5 if it order the stock because it involves the options of $45 or $50 ($40+$10).

Answer 2

Answer: C

Explanation:

You're seeing an opportunity in savings the cost is $40 + $10 for shipping = $50 versus $45 with free shipping. You get an extra item for less and it includes free shipping. So its a deal to actually buy the extra item.