Question

A professional basketball players' union negotiates a contract that dramatically increases all players' salaries. How would this influence the opportunity cost for a player who was considering giving up basketball to pursue a career in broadcasting?a. it should have no bearing on the player's decision from an economic standpointb. it would increase the opportunity cost of becoming a broadcasterc. it would cause the production possibilities frontier to become convexd. it would increase the opportunity cost of continuing to play professional basketballe. it would not affect the opportunity cost of playing basketball or of broadcasting

Answer 1

Answer:

B) It would increase the opportunity cost of becoming a broadcaster.

Explanation:

Opportunity costs are defined as the cost of choosing one alternative activity or investment over another.

The basketball player has two options, he can continue to play for an NBA team with a much better salary, or he can decide to become a broadcaster. If the player decides to quit basketball, then he will lose more money due to pay raise. That amount of money that he will lose if he decides to become a broadcaster is the opportunity cost of becoming a broadcaster. Since the pay increase raised the player's salary, the opportunity cost of becoming a broadcaster also increases.