Your aunt gives you some money for your birthday and you decide to put it into your savings account instead of spending it.The trade-off of not being able to spend the money now is this decision's ________ cost.

Question

Quizplus · Accepted Answer

The opportunity cost represents the benefits you would have received from spending the money now. In this case, it refers to the enjoyment or satisfaction you could have gained from using the money immediately. By choosing to save the money, you give up that opportunity in exchange for the potential benefits of having more money in the future. Fixed cost, variable cost, transaction cost, and total cost are not applicable in this scenario.

Your Aunt Gives You Some Money for Your Birthday and You