Instead of attending class one could have worked an extra ho

Instead of attending class, one could have worked an extra hour at the café for $10 or watched a neighbor’s child for $15. The opportunity cost of attending class is: a) $5 b) $10 c) $15 d) $25 please explain

Solution

Opportunity cost is $15 of attending class as it is best alternative forgone

In microeconomic theory, the opportunity cost of a choice is the value of the best alternative forgone, where a choice needs to be made between several mutually exclusive alternatives given limited resources. Assuming the best choice is made, it is the \"cost\" incurred by not enjoying the benefit that would be had by taking the second best choice available