Ted quits his $60,000-a-year job to be a stay-at-home dad.What is the opportunity cost of his decision?

Question

Quizplus · Accepted Answer

The opportunity cost of Ted's decision is the value of the next best alternative that he gave up by quitting his job, which is at least $60,000 per year. This is because he could have continued working and earning a salary of $60,000, but he chose to take care of his children instead. Therefore, the opportunity cost of his decision is the foregone income of $60,000 or more. Option A is incorrect because although he may not earn a salary, there is still a value associated with his time and effort in being a stay-at-home dad. Option B is incorrect because the "going rate" for stay-at-home dads is not relevant to determining the opportunity cost of Ted's decision. Option D is incorrect because the joy of parenting is not a measurable value and cannot be compared to the income he gave up.

Ted Quits His $60,000-A-Year Job to Be a Stay-At-Home Dad