Question

Jill is unemployed and decides to spend the day at the spa. Jill's opportunity cost of spending a day at the spa is equal to the ____ spa rate, any other ____ expenses, and the value of the best ____ activity in which Jill could be engaged.

Answer 1

Jill's opportunity cost for spending a day at the spa includes the spa rate, other incidental expenses, and the value of the next best alternative activity she could be doing.

Step-by-step explanation:

Jill's opportunity cost of spending a day at the spa is equal to the spa rate, any other incidental expenses, and the value of the best alternative activity in which Jill could be engaged. Opportunity cost involves not just the out-of-pocket monetary expenses but also the benefits forgone from the next best choice available to the individual. For Jill, as an unemployed person, her opportunity cost would include what she might otherwise have earned by working for a day or the personal value of activities foregone, such as job searching, upskilling, or having a day of rest.