When asked in an interview what she missed the most because of the time she spent training for the Olympics, a rower, who lived on her own, answered "a normal social life." She also revealed that she had given up a job that paid $30,000 per year to train fulltime. She received a grant of $8,000 per year from Sport Canada, but this failed to cover all her training expenses. Her food and rent were $5,000 per year and training expenses were $12,000 per year. Aside from the value of a normal social life, what is the annual opportunity cost, expressed in dollars, to this rower of "Going for Gold"?
A)$25,000
B)$4,000
C)$30,000
D)$39,000
E)$34,000

Question

Quizplus · Accepted Answer

The opportunity cost includes the foregone salary of $30,000 and the additional expenses not covered by the grant, which is $4,000 ($12,000 training expenses - $8,000 grant). Therefore, the total opportunity cost is $30,000 + $4,000 = $34,000.

When Asked in an Interview What She Missed the Most