Dexter decides to buy a new smartphone and offset the cost by selling his old phone to one of his friends.His friend has no money and wants to barter for the old phone.Dexter's preference for the items offered is in this order: laser printer,television,headphones,and bicycle.If Dexter accepts the laser printer as payment,what is his opportunity cost of this exchange?
A) the total value of the television,headphones,and bicycle
B) the difference between the value of the old phone and that of the new smartphone
C) There is no opportunity cost in a consensual trade.
D) the value of the laser printer
E) the value of the television

Question

Quizplus · Accepted Answer

The opportunity cost is the value of the next best alternative forgone, which in this case is the television, the item Dexter would have chosen next if he didn't choose the laser printer.

Dexter Decides to Buy a New Smartphone and Offset the Cost