Lucinda purchased a raffle ticket for $29. Just before the grand prize drawing, two people tried to buy her ticket. The first person offered $130, and another offered $165. What is Lucinda’s opportunity cost of keeping the raffle ticket? a. $194 b. $159

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02.07.2022 - 07:42

Lucinda purchased a raffle ticket for $29. Just before the grand prize drawing, two people tried to buy her ticket. The first person offered $130, and another offered $165. What is Lucinda’s opportunity cost of keeping the raffle ticket? a. $194 b. $159

Question:

Lucinda purchased a raffle ticket for $29. Just before the grand prize drawing, two people tried to buy her ticket. The first person offered $130, and another offered $165. What is Lucinda’s opportunity cost of keeping the raffle ticket?

a. $194

b. $159

c. $58

d. $165

Answers (1)

Willa April 15, 2023 в 08:39

The correct answer is (d) $165. Opportunity cost is the cost of the next best alternative that must be given up in order to pursue a certain action. In this case, Lucinda's opportunity cost of keeping the raffle ticket is the highest amount of money she could have received for it, which is $165. Neither of the other offers exceeds $165, so Lucinda's opportunity cost is not $194 or $159. The ticket itself cost $29, so the opportunity cost must be higher than that. Therefore, the correct answer is (d) $165.

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