Krugman's Economics For The Ap® Course
Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
Question
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Chapter 1, Problem 7MCQ
To determine

The question requires us to determine the definition of opportunity cost.

Expert Solution & Answer
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Explanation of Solution

An opportunity cost is the next best alternative option chosen by a person to get something else.

Suppose a person always prefers reading books over listening to audio. If he chooses to read the book, then the listening audio will be his opportunity cost for reading the book.

If a student has two options; taking an online class or earning through hourly freelancing, then for a student, foregone freelancing payment is the opportunity cost of taking online classes.

So, opportunity cost is the next best value of alternatives that must be given up to gain something.

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