Question

Erik bought a savings bond. He could have invested in a mutual fund and earned 2 percent more. The 2 percent he could have earned is the _____.

Answer 1

The answer to go in the blank would be ''opportunity cost'' since he had the chance to invest in his mutual fund and get two percent more so he could've gotten more money.

Answer 2

The 2 percent he could have earned is the opportunity cost.

Explanation:

Erik bought a savings bond. He could have invested in a mutual fund and earned 2 percent more.

The 2 percent he could have earned is the opportunity cost.

The opportunity cost is defined as the loss of potential gain from other alternatives when one alternative is chosen.