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 ________

Answer 1

Answer:

His opportunity cost at graduation was $50,000 and eight years later was $2 million.

Explanation:

Opportunity costs are defined as the extra costs (or lost benefits) resulting from choosing one activity (or investment) over another alternative.

When Billie was graduating from school, his opportunity cost of playing football was the $50,000 he could have earned by coaching. Eight years later, his opportunity cost of making movies was the $2 million he could have earned playing football.