PRC-3 · Chapter 9 · Question 13 of 45
A brilliant high school graduate is accepted into a top university. However, she considers taking a full-time job that pays Rs. 50,000 per month instead of studying. If she chooses to attend university, what does the foregone Rs. 50,000 per month represent in economic terms?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Opportunity cost
Explanation
Opportunity cost is the value of the next best alternative foregone when making a choice. By choosing to study, she sacrifices the potential income from working.
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