Question

Bill Bonecrusher graduates from college with a choice of playing professional football at $2 million a year or coaching for $50,000 a year. He decides to play football, but eight years later he quits football to make movies for $3 million a year. His opportunity cost at graduation was ________ and eight years later was ________

A. $50,000; $2 million
B. $2 million; $2 million
C. $2 million; $3 million
D. $50,000; $50,000

Answer 1

Answer:

Explanation:

Opportunity cost is the "cost" incurred by not enjoying the benefit associated with the best alternative choice.

Here the opportunity cost of playing professional football at $2 million a year is the coaching for $50,000 a year foregone.

The opportunity cost of quitting football and making movies is the $2 million income per year foregone on football.

Opportunity costs represent the benefits an individual, investor or business misses out on when choosing one alternative over another.