John has two hours of free time this evening. He ranked his alternatives, first go to a concert, second go to a movie, third study for an economics exam, and fourth answer his email. What is the opportunity cost of attending the concert for John?
A) Attending a movie
B) Answering his email
C) Studying for an economics exam
D) Going to the concert because that is what John chose to do
E) Attending a movie, studying for an economics exam, and answering his email

Question

Quizplus · Accepted Answer

The opportunity cost of an action is the value of the next best alternative foregone. Since John ranked attending a movie as his second choice, the opportunity cost of attending the concert is the value of attending the movie, which he forgoes by choosing the concert.

John Has Two Hours of Free Time This Evening