Question

Allison is contemplating a job offer with an advertising agency where she will make $54,000 in her first year of employment. Alternatively, Allison can begin to work in her father's business where she will earn an annual salary of $38,000. If Allison decides to work with her father, the opportunity cost would be:

Answer 1

Answer:

$54,000

Explanation:

The opportunity cost is that cost which can be given the benefit out of the given options. In another way, it would be select the best alternative option which gives you the best results or benefits.  

In the given case, Allison earns $54,000 in her first year of employment and if she works with her father she earns an annual salary of $38,000. So, the opportunity cost, in this case, would be $54,000