Allison is contemplating a job offer with an advertising agency where she will make $54,000 in her first year of employment. Alternatively, Allison can begin to work in her father's business where she will earn an annual salary of $38,000. If Allison decides to work with her father, the opportunity cost would be:

Question

Quizplus · Accepted Answer

The opportunity cost of choosing one option over another is the value of the opportunity lost. In this case, if Allison chooses to work in her father's business for $38,000 instead of taking the job offer with the advertising agency for $54,000, the opportunity cost is the difference in salary she foregoes, which is $54,000.

Allison Is Contemplating a Job Offer with an Advertising Agency