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?

Answer 1

Answer:

The opportunity cost for Ricardo is the is the time that he won't be able to spend with his friends.

Explanation:

The opportunity cost is defined as the value of the next best option that was not taken. in this case, when Ricardo prefers to have the promotion, it implies that he will spend more time working, sacrificing his free time with friends. when he decided to spend that time with his new role as a supervisor, he cannot spend that time doing another activity.

Another example could be when someone decides to spend money on a new tv instead of a language course, in this case, the opportunity cost is the knowledge that you could have gained in the course. the most important concept is that it is possible just to use resources in one option, sacrificing other opportunity.