Question

From 8 to 11 p.m., Sam can either attend a basketball game, a hockey match or the symphony. Suppose that Sam decides to attend the hockey match and thinks to herself that if she did not go to the match she would go to the symphony. Then the opportunity cost of attending the hockey match is

A) going to the symphony and the basketball game.
B) going to the symphony.
C) going to the basketball game.
D) three hours of time.

Answer 1

Answer:

The correct answer is option B.

Explanation:

The opportunity cost of an economic decision can be defined as the cost of sacrificing or giving up the second-best alternative.  

Sam has 3 hours to either attend a basketball game, a hockey match or the symphony.

If she going to the hockey match is her first choice and going to the symphony is the second choice. In this situation, the second-best alternative of the hockey match is going to the symphony.  

So, the opportunity cost of attending the hockey match is going to the symphony.