What is the opportunity cost in this scenario?

A.) [Gretchen earned $500 from her summer job].| B.) [ She made a list of things that she wants to do with the money she earned.] She thought of spending $100 to buy a guitar amplifier, enrolling in a ballet class for $200, buying new clothes worth $100, and giving her mom a silver necklace worth $100. |C.) [When she went to buy the amplifier, she found it cost around $150.] She knew that she couldn't change the fee for the dance classes. So she had to adjust the budget for her clothes or her mom's gift.| D.) [In the end, she decided she would buy one pair of jeans instead of the two pairs of jeans she had planned.]

Question

Braxton Mckee

Business

31 May, 13:37

What is the opportunity cost in this scenario?

A.) [Gretchen earned $500 from her summer job].| B.) [ She made a list of things that she wants to do with the money she earned.] She thought of spending $100 to buy a guitar amplifier, enrolling in a ballet class for $200, buying new clothes worth $100, and giving her mom a silver necklace worth $100. |C.) [When she went to buy the amplifier, she found it cost around $150.] She knew that she couldn't change the fee for the dance classes. So she had to adjust the budget for her clothes or her mom's gift.| D.) [In the end, she decided she would buy one pair of jeans instead of the two pairs of jeans she had planned.]

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Elian Pacheco · Answer 1

Though Gretchen ended up only buying one pair of jeans instead of two, there are a lot of scenarious that could end up being an opportunity cost. In this case, Gretchen wanted to use the funds from her mom to purchase two pairs of jeans but because of other costs, she had only enough to purchase one. An opportunity cost is what you give up in exchange for purchasing one more unit of something else.