The divergence between money costs and opportunity costs will be greatest in which of the following situations?

Question

Quizplus · Accepted Answer

The greatest divergence between money costs and opportunity costs will occur when a resource is not being used in its next best alternative use. In choice C, the university is employing otherwise unemployed teenagers to paint crosswalks and curbs, which means that these teenagers may have been doing nothing otherwise. Therefore, the opportunity cost of their labor is low, while the money cost of paying them is still significant. In the other choices, the resources being used have other viable alternative uses, so the opportunity cost is higher and the divergence between money cost and opportunity cost is lower.

The Divergence Between Money Costs and Opportunity Costs Will Be