Ravi has only two hours in the evening. He can earn ₹400 by tutoring during those hours 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 that is sacrificed when a choice is made. Ravi chooses to watch the match, so he gives up the best available alternative: tutoring and earning ₹400. The enjoyment of the match is a benefit of his chosen activity, not its opportunity cost. The two hours describe the scarce resource, while travel cost is not stated as the forgone alternative. Thus option A is correct.
Frequently asked questions
What is the correct answer to this question?
The ₹400 he could have earned by tutoring
Why is this the correct answer?
Opportunity cost is the value of the next-best alternative that is sacrificed when a choice is made. Ravi chooses to watch the match, so he gives up the best available alternative: tutoring and earning ₹400. The enjoyment of the match is a benefit of his chosen activity, not its opportunity cost. The two hours describe the scarce resource, while travel cost is not stated as the forgone alternative. Thus option A is correct.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: Introduction to Economics. Topic: Scarcity and Choice.
