Which of the following is an example of an opportunity cost?
A) Depositing money into a savings account so you will be able to pay cash for holiday gifts
B) Buying a car which depletes your savings
C) Giving up going to a movie in order to study for your finance exam
D) Purchasing a new computer

Question

Quizplus · Accepted Answer

Opportunity cost is the value of the next best alternative that is forgone in order to pursue a certain action. In this case, giving up going to a movie in order to study for a finance exam means that the opportunity cost is the enjoyment and relaxation that could have been obtained from watching the movie. The other choices do not necessarily involve a trade-off between alternatives.

Which of the Following Is an Example of an Opportunity