Question 4
Basic ConceptsA student has ₦30.00 with which to buy a ruler costing ₦18.00 and an exercise book costing ₦25.00. If he buys the exercise book, his opportunity cost is
- A.the ruler
- B.the exercise book
- C.₦25.00
- D.₦18.00
Show the answer and explanation
Answer: A (the ruler)
Explanation
He cannot afford both (₦43 > ₦30). Opportunity cost is the next best alternative given up, which is the ruler itself, not its money price.