Question

Every society faces trade-offs because we live in a world of scarcity. Suppose a student-athlete has the opportunity to earn$400,000next year playing for a minor league baseball team,$700,000next year playing for a European professional football team, or $0 returning to college for another year.The opportunity cost of the student-athlete returning to college next year is______________--

Answer 1

Answer:

Earning $700,000 next year playing for a European professional football team

Explanation:

Opportunity cost is the sacrificed option in decision making. The value of opportunity cost is expressed as the forfeited benefits from the next best alternative. Opportunity cost arises due to scarcity of resources, including time and finances.

The student-athlete cannot be in school and engage in play in a professional league in the same year. The student has to pick one option as he or she cannot be in two places at the same time. The forfeited option is the opportunity cost. In the case of many options, the forgone option with the highest value is the opportunity cost. For this student-athlete, $700,000 missed for not playing for a European professional football team is the opportunity cost. It represents the next best alternative from the option chosen.