Question

Ricardo works part time at a local computer store. One day, his manager approaches him about moving from cashier to floor supervisor. Ricardo is excited because the promotion comes with a raise; however, the extra work hours would take away from time with his friends. In the end, he decides to take the promotion.
What is Ricardo’s opportunity cost?


losing extra time to spend with his friends
being able to use the extra money for summer football camp
losing the ability to spend any time with his friends
receiving another promotion in six months

Answer 1

The correct answer is "losing extra time to spend with his friends".

The opportunity cost is an economic concept defined as the loss of benefits (earnings, resources, etc) that an individuals experiences when choosing one option over another. In this case, Ricardo chooses the promotion as he considers it as the best option available, but he is renouncing to having the extra time available to spend it with his friends as he did before, as now he will have to spend that time at work.

Hence, in this example the benefit loss is quantified in terms of time.

Answer 2

Answer:

Losing extra time to spend with friends

Explanation:

took the test.