The time to bake a pie is Billy Bob's opportunity cost of changing the oil. Meanwhile, oil change time is Billy Bob's opportunity cost when baking a pie.
We can arrive at this answer because:
- Opportunity cost refers to an element that has to be abandoned so that another element can happen.
- This is because both elements need the same resource and it is not possible to provide this resource to both at the same time.
As we can see from the above question, the time Billy Bob takes to change the oil is roughly the same time he spends baking a pie.
In this case, when changing the oil, he has to give up baking the pie, which makes the time to bake the pie the opportunity cost.
Likewise, when baking the pie, Billy Bob spends the time of changing the oil and that is the opportunity cost.
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