Question

The opportunity cost of sunshine is

• A. -1
• B. -1 to +1
• C. Zero
• D. 1

Hint:

Opportunity Cost Principles: Free Goods (Sunshine, Air) = Opportunity Cost is ZERO. Economic Goods (Grain, Land) = Positive Opportunity Cost.

Answer 1

The Correct Option is C

Step 1: Understanding the Concept:
Economic classification of free goods vs economic goods: non-scarce natural resources available in unlimited supply have zero opportunity cost.
Key Formula or Approach:
\[ \text{Opportunity Cost} = \text{Value of next best alternative forgone} = 0 \quad (\text{for Free Goods}) \]

Step 2: Detailed Explanation:
In fundamental microeconomics:
1. Economic Goods: Scarce resources requiring alternative allocation; consuming one unit requires sacrificing production/consumption of another good (positive opportunity cost $> 0$).
2. Free Goods (Sunshine, Atmospheric Air, Rain): Natural gifts of nature that exist in unlimited, non-scarce abundance at zero price without requiring labor or resource diversion. Utilizing sunshine entails zero sacrifice of any alternative good.
- Therefore, the Opportunity Cost of Sunshine is Zero.

Step 3: Final Answer:
Therefore, the opportunity cost of sunshine is Zero, corresponding to option (C).