Answer:
The correct answer is: $100 (dollars).
Step-by-step explanation:
Opportunity cost is what a person sacrifices when they choose one option over others. It represents the difference between the choice that was taken and the options that were left on the table. Its formula is:
Opportunity Cost = FO - CO
- FO = Return on best foregone option
- CO = Return on chosen option
In the case, if Lisa chooses to write the term paper:
- FO = Working on her job + Going out with a friend
- FO = $60 + $ 80
- FO = $140
- CO = Writing the term paper
- CO = $40
- Opportunity cost = FO - CO
- Opportunity cost = $140 - $40
- Opportunity cost = $100
So, the opportunity cost of writing the term paper is $100.