Question

Sam wrote a list of how he would prefer to spend his Saturday shemoon
first choice
second cholce
third choice
fourth choice
go to a cricket match watch the annual town parade
go to the cinema
visit relatives
Unfortunately, a thunderstorm caused the cricket match and the town parade to be canceled Sam went to the cinema.
What was the opportunity cost of going to the cinema?
A. going to a cricket match
B. watching the annual town parade
C. visiting relatives
D. losing his Saturday free time

Answer 1

B. watching the annual town parade
In this scenario, the opportunity cost of going to the cinema is watching the annual town parade. This is because the thunderstorm caused both the cricket match and the town parade to be canceled, so by choosing to go to the cinema, Sam missed out on the experience of watching the annual town parade, which was his second choice activity. Visiting relatives (third choice) and losing his Saturday free time (fourth choice) were not the immediate alternatives that Sam gave priority to, hence the opportunity cost would be watching the annual town parade.