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# A student has N30.00 with which to buy a ruler costing N18.00 and an exercise bo...

### Question

A student has N30.00 with which to buy a ruler costing N18.00 and an exercise book costing N25.00. If he buys the exercise book, his opportunity cost is?

### Options

A)
the ruler
B)
the exercise book
C)
N25.00
D)
18.00

### Explanation:

In this situation, the student has N30.00 and wants to buy a ruler costing N18.00 and an exercise book costing N25.00. However, he cannot afford to buy both items, so he must choose between them.

Opportunity cost is defined as the next best alternative forgone when making a choice. In this case, if the student decides to buy the exercise book, he will not be able to buy the ruler, as he doesn't have enough money for both items.

Therefore, the opportunity cost of buying the exercise book is the ruler that he cannot buy because of his decision. So, the correct answer is Option A: the ruler.

It's important to understand that opportunity cost is not always about the monetary value, but rather about the value of the alternative option that is given up to pursue a chosen option. In this example, the opportunity cost is not the monetary value of the ruler (N18.00) but the ruler itself, as the student misses out on having it because he chose to buy the exercise book instead.