Question

What is the opportunity cost to john of saving at age 18? What did he give up? (hint there is no single right answer, you have to think "what might john have given up?")

Answer 1

Answer:

The opportunity costs of saving for a young person like John can be very varied, depending on what John desired to do with the money as second alternative.

For example, if John had as second alternative spending the money on a vacation, then, the opportunity cost of saving is giving up on that vacation. The same happens if John had thought of paying tuition, the opportunity cost of saving being not forgoing tuition in this case.