Meena can use a free afternoon either to tutor children for Rs 500 or to work in a shop for Rs 400; she chooses tutoring. The Rs 400 she gives up is an example of which economic idea?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Opportunity cost
The opportunity cost of a choice is the value of the next best alternative given up. By choosing tutoring, Meena gives up the Rs 400 she could have earned in the shop.