What is Ricardo’s opportunity cost? Ricardo works part time at a local computer store. One day, his manager approaches him about moving from cashier to floor supervisor. Ricardo is excited because the promotion comes with a raise; however, the extra work hours would take away from time with his friends and family. In the end, he decides to take the promotion.
Answer
A
losing the ability to spend any time with his family
B
losing extra time to spend with his friends and family
C
receiving another promotion in six months
D
being able to use the extra money for summer football camp
Explanation
Opportunity cost is the value of the next-best alternative given up when making a choice. By taking the promotion, Ricardo gives up some time with his friends and family because of the extra work hours. He does not necessarily lose all time with his family, so A, losing extra time with friends and family, is the best answer.
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