ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The correct answer to the given question is option c. the total cash expenditure needed to go to the movie plus the value of your time. The opportunity cost of going a movie is the net benefit associated with the next best alternative forsaken by choosing to go for the movie.

Detailed explanation-2: -For example, choosing public transportation to travel to a particular destination by foregoing the option of traveling in one’s own car is a good example of opportunity cost, because you end up saving money which needs to be spent on fuel.

Detailed explanation-3: -The opportunity cost of an item is what you give up to get that item. In this case, the opportunity cost of going to a movie includes both the total cash expenditure needed to go to the movie plus the value of the time you gave up in order to watch the movie.

Detailed explanation-4: -Opportunity Cost Example Deciding whether to spend a gift card on a strawberry smoothie or a banana smoothie. Deciding whether to spend $7 every morning on coffee or consistently invest that money in a retirement account. Deciding whether to invest capital in refurbishing equipment or in better employee training.