Anya got $12 for her birthday. she considers buying a dvd of her favorite movie for $11. she also thinks about buying a new t-shirt for $14. then she decides to buy a cd for $10. what is the opportunity cost of her decision? explain your answer.

Here we have two different decisions. Opportunity cost of buying the CD and not buying the DVD is 1: ($11-$10). And opportunity cost of buying the CD and not buying the new T-shirt is 4: ($14-10). Opportunity cost is the difference between the value of the option chosen and the value of the best option not made. If the option I choose gives me a benefit of 10 but there is an alternative option offered by 12, the opportunity cost is 2.

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