An Example of a Personal Opportunity Cost Would Be

question 62

Multiple Choice

An example of a personal opportunity cost would be

• A) Interest lost by using savings to make a purchase.
• B) Higher earnings on savings that must be kept on deposit a minimum of six months.
• C) Lost wages due to continuing as a full-time student.
• D) Time comparing several brands of personal computers.
• E) Having to pay a tax penalty due to not having enough withheld from your monthly salary.

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Definitions:

Encourage Efficiency

Motivate actions or processes to achieve maximum productivity with minimum wasted effort or expense.

Sunk Costs

Costs that have already been incurred and cannot be recovered, and thus should not influence future business decisions.

Opportunity Costs

Represents the benefits an individual, investor, or business misses out on when choosing one alternative over another.

Accounting System

A systematic process of recording, summarizing, and analyzing financial transactions of a business to provide accurate financial information.