Answer to Question #132668 in Microeconomics for Anas Ali Khan

Question

You graduate from college and are offered three jobs (Job A, Job B, and Job C). Assume that they are
identical in all respects (duties, benefits, promotion prospects, and so on) except that the salaries differ, as
shown below:
Job A $150,000
Job B $120,000
Job C $100,000
First, which of the three jobs would you choose? (No, you can’t have all three!) Because you have made a
choice, you have incurred an opportunity cost. What is the opportunity cost of your job choice?
Comparing benefits and costs, have you made a rational choice

Answer 1

Opportunity Costs for A:

$120,000+$100,000=$220,000

Opportunity Costs for B:

$150,000+$100,000=$250,000

Opportunity Costs for C:

$150,000+$120,000=$270,000

The student will choose job A because this job has the lowest opportunity cost. This choice will be optimal.