Question

Khalil is offered a free ticket to the opera which he cannot resell. His opportunity cost of going to the opera is:

Select one:
a. the price listed on the ticket.
b. the price listed on the ticket and whatever Khalil would have done had he not gone to the opera.
c. zero - the tickets were free.
d. whatever Khalil would have done had he not gone to the opera.

Answer 1

D. Whatever khali would have done had he not gone to the Opera.

Explanation:

Opportunity cost is the cost that is measured by the benefit foregone by an individual when choosen an alternative over another.

In many cases we face several options to choose from. When we have chosen one we miss the others. Opportunity cost is the benefit forgotten that can be obtained by the other options.

In this case if Khali goes to Opera, he surely misses what he would have done at that time. Time has other uses, he might have earned some money also.

Hence, in this case the opportunity cost of going Opera is whatever he would have done at the same time.