Suppose a student decides to spend two hours working at a part-time job instead of studying for an exam. She earns $40 from the job but scores 10 points lower on the exam than she otherwise would have. What is the opportunity cost of her decision?

Question

BlackTom AI · Accepted Answer

Opportunity cost equals the value of the next best alternative that you give up when you make a choice. In this case the student chose working for two hours instead of studying.

1) Relevant concepts
- Opportunity cost: the forgone benefit from the best alternative use of time/resources.
- Explicit benefit vs. forgone benefit: money earned is an explicit benefit she receives; opportunity cost is what she sacrifices by not choosing the alternative.

2) Step-by-step reasoning
- Identify the two relevant options the student considered: (A) work two hours and earn $40, (B) study for the exam and earn a higher exam score.
- She chose A (work) and thereby did not choose B (study).
- The next best foregone alternative is the improvement in exam performance she would have achieved by studying.

3) Intermediate steps / simple comparison
- Outcome of working: +$40, but exam score is 10 points lower than if she had studied.
- Outcome of studying (foregone): 10 extra exam points (no $40).
- Therefore the value she sacrificed by working is the 10 exam points she would have gained by studying.

4) Why the correct answer is correct
- Opportunity cost is the forgone benefit from the next best alternative; the next best alternative to working was studying, whose benefit was the 10-point higher score. So the opportunity cost equals the 10 points lost.

5) Why the other choices are incorrect
- (a) Time spent working instead of relaxing: relaxing is not presented as the next best alternative; the relevant tradeoff given is studying vs. working. 
- (c) The benefit of scoring higher on the exam: this is a vague restatement; the precise forgone benefit is the specific 10 points lost. Option (b) names that exact forgone benefit.
- (d) The $40 earned: that is the benefit she received from her choice, not what she gave up — thus not the opportunity cost.

6) Conclusion
The opportunity cost of her decision is the 10 points lost on the exam, so the correct answer is b.

Suppose a student decides to spend two hours working at a part-time job instead of studying for an exam. She earns $40 from the job but scores 10 points lower on the exam than she otherwise would have. What is the opportunity cost of her decision?单项选择题

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