If you own a condo and you decide to lease it to your cousin,
A) there is no opportunity cost of leasing the condo because you own it.
B) there is an opportunity cost of leasing the condo because you could have chosen to live in it.
C) there is no opportunity cost of leasing the condo because you collect rent from your cousin.
D) the only cost relevant to this decision is the price you paid for the condo.

Question

Quizplus · Accepted Answer

Opportunity cost refers to the benefit that is missed out on when choosing one alternative over another. In this case, by leasing the condo to your cousin, you are foregoing the opportunity to live in it yourself, which represents the opportunity cost of this decision.

If You Own a Condo and You Decide to Lease