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Ravi has only two hours in the evening. He can earn ₹400 by tutoring during that time or watch a cricket match. If he chooses to watch the match, what is his opportunity cost?

Answer and explanation

Correct answer: The ₹400 he could have earned by tutoring

Opportunity cost is the value of the next-best alternative given up when making a choice. By watching the match, Ravi gives up the opportunity to tutor and earn ₹400. The enjoyment of the match is a benefit of his chosen activity, not the cost of the forgone alternative. Therefore, option A is correct.

Related tags

Opportunity CostScarcity And ChoiceIntroduction To EconomicsEconomicsClass 11 Mcq

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