Is the concept of opportunity cost misunderstood? Survey evidence from students studying economics in Australia

The notion of opportunity cost is arguably the most fundamental concept in economics and is often viewed as crucial in explaining and understanding individual rational choice on the basis of trade-offs. This study surveys the responses to an opportunity cost question which was adapted from the popular textbook, Robert Frank and Ben Bernanke’s textbook, Introduction to Microeconomics (2001). The results attained in this study are consistent with the Ferraro and Taylor (2005) study and raises serious questions about the understanding of fundamental concepts in economics. Furthermore, there may be implications in the way fundamental concepts in economics are taught to students.