A university student faces the difficult decision of how to spend one hour tonight. She could babysit her professor's child at an hourly wage of $10; she could work at the college library at a wage of $12; or she could finish her economics homework assignment. If she chooses to complete her homework assignment, she has incurred an opportunity cost equal to:
A)$6.
B)$12.
C)$18.
D)$0.

Question

Quizplus · Accepted Answer

The opportunity cost is the value of the next best alternative foregone. In this case, working at the college library for $12 is the highest-paying alternative she gives up to complete her homework, making $12 the opportunity cost.

A University Student Faces the Difficult Decision of How to Spend