A consumer with $10 needs a dress, a pair of shoes, a handbag and jewelry costing $20, $10, $7 and $3 respectively. The opportunity cost of buying the pair ...

A consumer with $10 needs a dress, a pair of shoes, a handbag and jewelry costing $20, $10, $7 and $3 respectively. The opportunity cost of buying the pair of shoes Is the________

Answer Details

The opportunity cost of buying the pair of shoes is the next best alternative that the consumer must give up in order to buy the shoes. In this case, the consumer has a budget of $10, and they want to buy a dress, a pair of shoes, a handbag, and jewelry, but they can only afford to buy some of these items. To buy the shoes, the consumer must spend $10, which leaves them with no money to buy the dress or the handbag. Therefore, the opportunity cost of buying the pair of shoes is the value of the dress and the handbag, which is $20 + $7 = $27. In other words, the consumer must give up the opportunity to buy the dress and the handbag, which are their next best alternatives, in order to buy the shoes. So, the correct answer is option number 3, which is "Handbag and Jewelry".