Question

What is Ricardo’s opportunity cost?

Answer 1

The opportunity cost would be that the promotion would take time away from his friends since he accepted the promotion.

Answer 2

Opportunity costs are the costs of an economic choice, expressed in terms of the best "missed opportunity": it values the (unrealized) yield of the best possible alternative compared to the final decision. The profit achieved on the basis of these costs is called the economic profit.

The opportunity costs are therefore wider than the accounting costs. The accounting costs only give a monetary (expressed in money) valuation of the amount that is spent to acquire or do something. The opportunity costs also examine what a possible alternative use of resources could have yielded.