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WAEC Economics 2005 Question 4

Question 4

Basic Concepts

The 150.00 Naira which Olu would have used to purchase a textbook was used to buy a T-shirt. This implies that

  1. A.Olu's real cost is 15.00 Naira
  2. B.Olu's opportunity cost is the T-shirt he bought
  3. C.Olu's opportunity cost is the textbook
  4. D.Olu's money cost is also the real cost.
Show the answer and explanation

Answer: C (Olu's opportunity cost is the textbook)

Explanation

The opportunity cost is the alternative given up, which is the textbook, not the T-shirt bought.