Question

2. Jason can put his money in a savings account and earn about 12 cents in interest this month, or he can

loan it to Matt, who says he'll return the money plus $20 at the end of the month. He loans it to Matt.
a. The opportunity cost is

Answer 1

12 cents

Explanation:

opportunity cost of the next best option forgone when one alternative is chosen over other alternatives

by loaning matt the money he forgoes the opportunity to earn 12 cents in interest. this is his opportunity cost