Question

Opportunity costs can vary from person to person and: a) Can be calculated easily most of the time b) Can even be different for the same person at different points in time c) Are always known and predictable d) Represent explicit costs only

Answer 1

b) Can even be different for the same person at different points in time

Explanation:

Opportunity costs are very dependent on the specific situation. The same individual would have different costs, for example, if one of the two following scenarios occurred while the person was working at a contract job (e.g., gig artist) paying $20/hour. The job only pays for actual work time.

Scenario 1: An opportunity presents itself where a second client offers $25/hour of a similar job.

Scenario 2: A friend invites the person to see a movie which would lead to the loss of the first gig.

The first scenario would be a gain of $5/hour while the second would mean a lost opportunity of $20/hour