Question

#10. Isaac has four potential jobs to consider, each with different salary offers. He can only accept one of the jobs. From highest to lowest, the salaries are: $47,500, $46,000, $45,000, and $42,000. Based on the information provided, of Isaac accepts the highest-paying position, what is his opportunity cost of this position

Answer 1

$46,000

Step-by-step explanation:

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

In this case, Isaac's opportunity cost of choosing the highest paying job is equal to the salary of the second highest paying job = $46,000.

Even though Isaac has 4 job offers, he can only choose one, therefore his opportunity will also only include the salary of the second highest paying alternative and not the sum of the remaining 3.