Question

Lawrence just got a $1,500 bonus and is debating between buying a new computer for $700 and buying a home theater for $1,200. He decides to buy the computer. What best explains the benefit and opportunity cost of his purchase?

Answer 1

well now he has one of the things that he wanted and he has some money in the bank to build up interest or to have for an emergency. it was also good because it was the cheaper of the two items.

have a good day!

Answer 2

Amount of Bonus received by Lawrence = $1500

Cost Price of the computer = $700

Cost price of a home theater = $1200

Now, Lawrence decides to buy a computer.

And we need to find the benefit and the opportunity cost of his purchase.

Since, The cost price of the computer is less than that of the bonus received by him.

So, He will be in benefit for sure.

Opportunity cost = 1500 - 700

= $800