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Question
that pays $20 an hour. the teen knows that if they choose a full - time job, they’ll be able to hang out with their friends in the evenings, but if they choose the night - shift job, they won’t. the teen chooses the night - shift job—that means the value of the next best alternative is $15 an hour, plus the ability to hang out with friends in the evening. those are the opportunities they will now miss out on because they chose the $20 - an - hour night - shift job.
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Opportunity cost is the value of the next - best alternative forgone. Here, the teen choosing the $20 - an - hour night - shift job gives up the $15 - an - hour job and the ability to hang out with friends in the evening, which are the next best alternatives.
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