Answer to Question #121144 in Microeconomics for shahbaz

Question

Q2) Mr. Umais can earn money from various activities. His hourly earnings from cricket is Rs.5,000, acting Rs.30,000, coaching Rs.10,000 and ceremonies Rs.15,000. What is the opportunity cost of an hour of coaching for Umais?

Answer 1

Opportunity cost= Return on most profitable investment- Return on investment chosen to pursue

Return on most profitable investment is acting which is Rs 30,000

Return on investment chosen to pursue is coaching which is Rs 10,000

So, opportunity cost=Rs 30,000 - RS 10,000

Which gives us Rs 20,000

Opportunity cost for an hour of coaching for Umais is Rs 20,000