Musa has a choice of buying a shirt, a book and a bag. What is the opportunity cost of buying a book?
- A bag only
- A book and a bag
-
A shirit and a bag
- A shirit only
The correct answer is: C
Explanation
The opportunity cost is simply explained as the foregone alternative. It is what you give up in order to buy something else.
In this case, Musa can either buy a shirt, a book, or a bag, but cannot buy all of them at the same time. If he decides to buy a book, the bag and shirt that he did not buy are the opportunity cost.