Suppose that you have saved $100 . You can spend it today or you can put it in your savings account for a year and earn 5% interest. What is the opportunity cost of spending the money today?
What will be an ideal response?
If you put the money in your savings account, you will have $105 to spend next year on the item (or items) of your choice. Thus, the opportunity cost of spending the money today is the enjoyment you give up by not having the $105 to buy something next year.
You might also like to view...
What result of the Uruguay Round was the most significant for global trade?
What will be an ideal response?
The social marginal cost curve is higher than the private marginal cost curve
a. True b. False Indicate whether the statement is true or false
Most economists have reached the following conclusion about supply-side economics.
A. Supply-side tax cuts are likely to reduce income inequality. B. Supply-side tax cuts are almost certain to lead to smaller budget deficits. C. Supply-side tax cuts are likely to widen income inequality. D. None of these.
Which of the following represents an accurate situation for a perfectly competitive firm?
A. P = $5 and MR = $7 B. P = $9 and MR = $9 C. P = $16 and MR = $0 D. P = $12 and MR = $8