A student has N30.00 with which to buy a ruler costing N18.00 and an exercise book costing N25.00. If he buys the exercise book, his opportunity cost is?

A student has N30.00 with which to buy a ruler costing N18.00 and an exercise book costing N25.00. If he buys the exercise book, his opportunity cost is?

Answer Details

If the student has N30.00 with which to buy a ruler costing N18.00 and an exercise book costing N25.00, but chooses to buy the exercise book, his opportunity cost is the next best alternative foregone, which is the ruler. Opportunity cost refers to the value of the next best alternative that is forgone when choosing between two or more options. In this case, the student has two options: buying a ruler or an exercise book. If the student chooses to buy the exercise book, then the opportunity cost is the value of the ruler, which is N18.00. Therefore, the correct answer is "the ruler."