Chapter 1, Problem 3CYU

a)

To determine

The question requires us to determine the best suited example of opportunity cost.

Answer to Problem 3CYU

Yes. The increased time spent on new job is an opportunity cost.

Explanation of Solution

The increased time spent on new job will bring the benefits (either in monetary terms or some extra perks) to the person. It will incur if the person will accept the new job. The benefit the person would receive from spending that increased time doing some alternative work is an opportunity cost of the new job.

Economics Concept Introduction

Opportunity cost is the next best alternative option that a person chooses. It is result of choosing one best option while forgoing next best alternative option.

b)

To determine

The question requires us to determine the best suited example of opportunity cost.

Answer to Problem 3CYU

Yes. The salary from old job is an opportunity cost of new job.

Explanation of Solution

Opportunity cost is the best foregone option. In order to get new job at higher salary the person has to give up his current job. The salary he is getting from current job is the best alternative option a person can give up to get a new job.

So, current salary that is, $45,000 is an opportunity cost of the new job.

c)

To determine

The question requires us to determine the best suited example of opportunity cost.

Answer to Problem 3CYU

No. a more spacious office at new job is not an opportunity cost of new job.

Explanation of Solution

A more spacious office is something that comes under an additional perks of new job and it does not involve giving up of something else to get this.

So, more spacious office is not an opportunity cost of new job.