Tony just purchased a set of skis on craigslist. Several people contacted the seller, but Tony offered more money. This is an example of:

a. production efficiency.

b. opportunity cost.

c. allocative efficiency.

d. equity.

B. opportunity cost.

Explanation: Opportunity cost is the cost that must be given up in order to purchase or acquire something, the extra money added by Tony in order to purchase the set of skis on craigslist.

Opportunity cost is also known as the cost of what was given up, which in this case is the extra money above the cost price of the skis on craigslist paid to acquire the skis, it refers to the value a person could have saved but gave up in pursuit of a given want.