Suppose Mike has three hours of time to spend and he sets the following activities in order of priority: (1) study Macroeconomics; (2) see a movie; (3) attend a ball game. Assume that each activity takes three hours. What is Mike's opportunity cost of studying Macroeconomics

(2) see a movie;      

Explanation:

Mike's opportunity cost of studying macroeconomics is seeing a movie. Opportunity cost is the value of next alternative forgone. That is, the enjoyment an individual would have derived if he/she had opted in for the next alternative to his/her current choice. The next alternative to studying microeconomics was to go see a movie.

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