Jackie has the following information to evaluate-her current salary of $74,000 versus total revenues of $120,000and expenses of $67,000 from starting a new business. How much is the opportunity cost associated with staying at her current job?
A)$53,000
B)$187,000
C)$74,000
D)$7000

Question

Quizplus · Accepted Answer

The opportunity cost is the benefit Jackie would give up by not starting the new business. Therefore, we need to subtract the potential revenues ($120,000) minus the potential expenses ($67,000) which gives us a potential profit of $53,000. Therefore, the opportunity cost of staying at her current job is $53,000.

Jackie Has the Following Information to Evaluate-Her Current Salary of $74,000