Question

Your aunt is thinking about opening a hardware store. She estimates that it would cost $400,000 per year to rent the location and buy the stock. In addition, she would have to quit her $50,000 per year job as an accountant. What is the opportunity cost of something?
(A) The time it takes to do something
(B) What must be given up to acquire it
(C) Cost to produce it
(D) What you pay

Answer 1

Answer:

(B) What must be given up to acquire it

Explanation:

Opportunity cost, in a simple language, means trade-off or an income or savings that we need to forego.

It is the amount or value of a certain event or activity that must be given off due to choosing one alternative over another.

In this case, the salary of $50,000 per year is the opportunity cost.