Question

question 6 / 10
you received $50 as a birthday gift and chose to spend it on new wallpaper for your room. the opportunity cost of this decision is:
a. the price of the wallpaper you bought.
b. the other items you could have purchased with your $50.
c. the time you could have spent doing other things.
d. all of the above

Explanation:

Opportunity cost is the value of the next - best alternative forgone when a decision is made. When you spend $50 on wallpaper, the opportunity cost includes:

• Option A: The price of the wallpaper is the explicit cost, but opportunity cost also considers what is given up. However, the other items (Option B) you could have bought with $50 and the time (Option C) you could have spent doing other things are also part of the opportunity cost. So all these aspects (A, B, C) together represent the opportunity cost.

Answer:

D. All of the above