Based on the passage, which situation is the best example of opportunity cost?
Analyze and Evaluate Information and Ideas · TELPAS Grades 10–12 reading. The correct answer, and the reasoning behind it.
Reporting category 3: make inferences, draw conclusions, and think about why the author wrote a text and how it is built.
Read the passage. Then answer the questions.
Nothing Is Really Free
Imagine a friend gives you a free ticket to a concert on Saturday night. It seems as if the evening will cost you nothing. An economist would disagree. The ticket is free, but your Saturday night is not.
The reason is scarcity. Time, money, and energy are all limited, so choosing one thing always means giving up something else. Economists call the value of the best option you give up the opportunity cost of a choice. If you would otherwise have worked a five-hour shift and earned sixty dollars, the opportunity cost of the free concert is at least those sixty dollars. If you would have spent the night studying for a chemistry test, the cost might be a better grade.
Opportunity cost explains decisions that seem strange at first. Why might a skilled carpenter pay someone else to paint her house, even if she paints faster? Because every hour she spends painting is an hour she could have spent on carpentry jobs that pay more. Hiring a painter is not laziness; it is a way to avoid an expensive trade-off.
The idea also applies to big decisions, such as whether to go to college. The obvious costs are tuition, books, and fees. A less obvious cost is the wages a student does not earn while attending classes full-time. Economists include those lost wages because they are a real part of what the student gives up. Many studies have found that, on average, people with college degrees earn more over their lifetimes, which is why many people decide the trade is worth it. But looking at the opportunity cost helps a student compare options honestly, such as a two-year technical program, a four-year degree, or working while studying part-time.
None of this means people should calculate the dollar value of every hour. Some of the most important parts of a choice, like time with family or the satisfaction of learning, are hard to measure in money. The point is simply to ask a better question. Instead of asking "How much does this cost?" an economist asks "What am I giving up to get it?"
So go to the concert, if you want to. Just recognize that it was never completely free.
The question
Choose the best answer.
Based on the passage, which situation is the best example of opportunity cost?
- Andres's phone bill stays at forty dollars a month, the same as last year.
- Andres finds a twenty-dollar bill on the sidewalk on his way to school.
- Andres skips a paid Saturday shift to tour a college and loses that day's pay.Correct answer
- Andres's bus fare to school goes up by fifty cents at the start of the year.
Why “Andres skips a paid Saturday shift to tour a college and loses that day's pay.” is correct
This asks the student to apply a concept from the passage to a new situation, which is an analysis skill. Opportunity cost is the value of the best option given up, so the correct example must include a choice and something lost. Only the paid shift fits.
Why the other answers are wrong
- Andres's phone bill stays at forty dollars a month, the same as last year. — The bill stays the same and Andres makes no choice between options, so nothing is given up.
- Andres finds a twenty-dollar bill on the sidewalk on his way to school. — Nothing is given up here, so there is no choice and no opportunity cost.
- Andres's bus fare to school goes up by fifty cents at the start of the year. — A price increase is not a choice between options, so it does not show opportunity cost.
Practice more of this
More reading practice for Grades 10–12, or see the TELPAS practice test for 10th–12th grade.
This is an independent study resource. It is not affiliated with, endorsed by, or connected to the Texas Education Agency or the official TELPAS program. All questions here are original practice material written to match the published test design.