You win $100 in a basketball pool. you have a choice between spending the money now and

You win $100 in a basketball pool. you have a choice between spending the money now and putting it away for a year in a bank account that pays 5 percent interest. what is the opportunity cost of spending the $100 now?

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  1. Purchases she could have made with $30,000 plus the earnings foregone


    Opportunity cost refers to the benefit obtained from the next best alternative.

    Here, the opportunity cost of spending a year in the college is the purchases worth of $30,000 that she would have do it and the money income that she would have earned it.

    Opportunity cost can be represented in terms of monetary and non monetary.

  2. By spending the $100, you could be giving up the chance to have a bit of money in your bank account in the future. However, you could be able to buy whatever you want with it that could benefit you or make you happy.

  3. $15
    Explanation: The opportunity cost is the opportunity lost in this case $300 at 5% annual interest = $315 after one year. So 315-300 =15 is the opportunity lost.

  4. C. The reduction in funding for research to cure other diseases. 

    E. whether the last dollar devoted to research on heart disease results in more benefit than the last dollar spent on research for curing other diseases.


    Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.

    In this question, the opportunity cost is the The reduction in funding for research to cure other diseases. 

    Rational decision makers should only choose an option when the marginal benefits exceeds the marginal cost .

    I hope my answer helps you

  5. The correct answer is letter "A": is a measure of the opportunity cost of spending a dollar.


    The Time Value Of Money states a dollar today is always worth more than a dollar tomorrow. This is based on the idea that by having money today we could invest it or save it in the bank so in a determined period that money will provide profits or interest. If the same amount of money is invested tomorrow or next month, the return or interest we would get could be lower.

    Opportunity cost is the return obtained after taking one choice compared to the choices forgone. Thus, we could say that the time value of money represents the opportunity cost of having a sum of money today.

  6. B) $15


    Opportunity costs are the extra costs or benefits lost that result from choosing one activity (or investment) over another alternative.

    In this case, you have two alternative actions:

    spend the $300 today on whatever you wantsave the money and you will have $315 in one year (= $300 x 1.05)

    If you choose to spend the money today, your opportunity cost = $300 (money available today) - $315 (money available in one year) = -$15

  7. Thanks for submitting your question to

    The opportunity cost of spending more money on finding a cure for heart disease is the money that needs to be taken out of funding to find the cure for other diseases.

  8. 1.

    a. It is the amount of income that he may have gained in case he finished his Bachelor majoring in Finance ($150,000/Year).

    b. The decision should be based on the economic profit once a decision is made. In other words, all the benefits and costs including explicit costs and implicit costs (opportunity costs) are taken into consideration so the choice with highest economic profit is chosen.

    c. No, they are not. It may be measured in various terms including personal values, time, personal feelings, personal health...In fact, opportunity costs are the costs which are lost in once a decision is made, these costs are not necessarily measured in quantitative form, instead, they may be measured in qualitative form.

    d. The opportunity costs may be in various forms such as: payment you may earn from working part-time job in these 90 minutes; watching your favorite sport game and getting exciting; go to the gym to get fit


    a. Explicit cost: tuition fees and other costs relating to the study such as books, accommodation, documents printing... Implicit cost: payment you may earn by starting full-time working instead of going to college

    b. Because it will not bring them economic profit. In fact, going to college causes them huge opportunity cost ( even bigger then the explicit cost which is mainly the tuition fees) relating to the huge income sacrifice, the time they spend to practice to get better in their career ( which will result in higher income in the future) instead of going to classes.

    c. An intelligent person is not necessarily a person perform their best in college. It may be a person that is best in sport, cooking, singing. Thus, they should be specialized in the industry/field that they are the best of themselves to minimize the opportunity cost and maximize benefits. Thus, college is not always the right choice for everyone.  


    Explanation is given right in each answer.

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