opportunity cost

opportunity cost : The opportunity cost of capital is the expected return forgone by bypassing of other potential investment activities for a given capital. It is a rate of return that investors could earn in financial markets...   More from Wikipedia

opportunity cost : An opportunity school is an alternative to regular schools. Students who may be applicable to attend opportunity schools are students who have unique situations that may hinder their abilities in an average schooling environment. This may include: students who cannot work well in large groups such..   More from Wikipedia

  Mr. Reuter and his daughter explain the economic concept "opportunity cost."

  There's an opportunity cost to everything.

Question : Jamie's farm is better suited for growing corn than wheat. He can grow 900 bushels of corn or 300 bushels of wheat or any combination in between. What is Jamie's opportunity cost of producing an additional bushel of wheat? What formula do I use to get this answer?

Answer : Ans- 3 bushels of corn. Since He can grow 900 bushels of corn or 300 bushels of wheat or any combination in between, ratio between corn and wheat bushels is 1:3. That means to produce one additional bushel of wheat he will have to sacrifice 3 bushels of corn. (Opportunity cost is the value of the next best choice that one gives up when making a decision)..   More from Yahoo Answers

Question : You win $800. You have a choice of spending the money now or putting it away for a year in a bank certificate of deposit earning 5.9% interest. Again, What is the opportunity cost of spending the $800 now compared to what you would have in one year?

Answer : The 'Opportunity cost' is not quantifyable. It's the loss of an unknown opportunity you can't take. Example, half way into your committed term someone offers you a 100% return on investment, but you can't take it because your money's tied up...   More from Yahoo Answers

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