Suppose that you have a choice between going to the movies with a friend for two hours or working a part-time job. If you go to the movies, you will spend $8 on a ticket and $5 on popcorn. If you choose to work, you will earn $15 an hour. a) What is your opportunity cost of working?

The opportunity cost means the option you didn’t pick. In this situation, the opportunity cost would be going to the movies with a friend because you decided to work instead. But on the good side, you save $13 by not going, and the extra $15 you got from working added together comes to $28.

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