Question

Gomer decides to spend an hour playing basketball rather than studying. What is Gomer's opportunity cost?

1) The increase in skill he obtains from playing basketball for that hour.
2) Nothing, because he enjoys playing basketball more than studying.
3) Nothing, because he had a free pass into the sports complex to play basketball.
4) The benefit to his grades from studying for an hour.

Answer 1

Gomer's opportunity cost for playing basketball instead of studying is the lost benefit that studying for an hour would have had on his grades.

Step-by-step explanation:

The opportunity cost of Gomer deciding to spend an hour playing basketball rather than studying is the benefit to his grades from studying for that hour. Opportunity cost refers to the most desirable alternative given up as a result of a decision. In this case, while Gomer might enjoy basketball, and even if there was no monetary cost for playing (free pass to the sports complex), the real cost is the lost opportunity to improve his academic performance by studying. Therefore, the correct answer is 4) The benefit to his grades from studying for an hour.