Question

Dawnell is a skilled dancer. She is currently teaching modern dance full time for three high schools and makes $44,000 a year. She is now giving up her work and joining a touring dance company for the next two years. She will make $24,000 a year dancing, but gain much more in experience and connections. Dawnell’s decision will result in a. a one year opportunity cost of $44,000 after leaving her teaching position. b. a one year opportunity cost of $24,000 after leaving her teaching position. c. a two year opportunity cost of $88,000 after leaving her teaching position. d. a two year opportunity cost of $40,000 after leaving her teaching position.

Answer 1

Answer: d. a two year opportunity cost of $40,000 after leaving her teaching position.

Explanation:

Hi, to answer this we have to analyze the information given.

The difference between teaching modern dance and joining a touring dance company per year is:

• $44,000- $24,000 = $20,000

We simply subtracted the earnings per year at the touring dance company to the earnings per year of teaching modern dance.

The opportunity cost per year is $20,000.

Since she is joining the touring dance company for 2 years, the opportunity cost is:

• 20,000 x 2 = 40,000  

Dawnell’s decision will result in a two-year opportunity cost of $40,000 after leaving her teaching position. (option d)

Answer 2

Answer:

d. a two year opportunity cost of $40,000 after leaving her teaching position.

Explanation:

Opportunity cost can be defined as the loss of benefits or opportunity a person loses or misses out on due to the fact that they are choosing a particular alternative over another one.

Opportunity cost can also be defined as the cost of choosing one alternative or option over another alternative or option.

In the question above, Dawnell is leaving her teaching job which pays her $44,000 per year for a job in a touring company as a dancer for 2 years that would pay her $24,000 per year.

Dawnell's opportunity cost can be calculated as :

Subtracting the pay from her previous job from her future job

We have :

$44000 - $24000

= $20,000

That would be $20,000 per year

So we multiply that by 2 years

= $20,000 × 2 years

= $40,000

This would be an 2 year opportunity cost of $40,000.