Jen won $900 in a lottery.She has a choice between using the money to buy a sofa,a television,or going on a vacation.If she chooses to buy a television,the opportunity cost of this decision is
A) zero because she won the money.
B) the sofa and the vacation trip.
C) the sofa, the vacation trip, and $900.
D) the sofa if that was her second choice.

Question

Quizplus · Accepted Answer

The opportunity cost of purchasing a television is the value of the next best alternative, which in this case is the sofa. Therefore, if the sofa was Jen's second choice, it would make the most sense for her to purchase the television. The vacation is likely the most expensive choice, so it may not be the best option with only $900.

Jen Won $900 in a Lottery