Answer to Question #175217 in Economics of Enterprise for murli boga

Question

Ali went for real state training for 12 weeks for $3000 and $200 for books. During these 12 weeks, he can only work for 20 hours instead of 40 hours per week for $15per hour.

Ali’s rent remains the same$1000during the 12 weeks of the training.

What is opportunity cost of attending the training.

 

Answer 1

Opportunity cost is the cost of the next best alternative foregone. Given the Ali goes to attend training, he can only work 20 hours. The earning that he is giving up to attend the training is:

20*15*12 = $3600.

So, $3600 is the opportunity cost of attending the training.