Question

It is a beautiful afternoon, and you are considering taking a leisurely stroll through the park. Your alternatives to walking are streaming a movie that you value at $5, taking a nap that you value at $7, or reading a new book that you value at $12. What is the opportunity cost to you of taking the stroll through the park?

$0

$7

$5

$12

Answer 1

Answer:

0

Explanation:

Answer 2

Answer:

$12

Explanation:

The next best alternative is reading a new book at $12; therefore, the opportunity cost of taking the stroll through the park is $12.

In this case, steaming the movie is $5 and taking a nap is $7 which are lower than $12 which means these two values are not included in the final opportunity cost.

If the question asked what is the opportunity cost of reading a new book (and taking a walk in the park isn't an option) then the $7 value of taking a nap would be the opportunity as it will be the next best thing from reading a new book.