Question

A professional basketball players' union negotiates a contract that dramatically increases all players' salaries. How would this influence the opportunity cost for a player who was considering giving up basketball to pursue a career in broadcasting?

• A. it would not affect the opportunity cost of playing basketball or of broadcasting
• B. it would increase the opportunity cost of continuing to play professional basketball
• C. it would cause the production possibilities frontier to become convex
• D. it would increase the opportunity cost of becoming a broadcaster

Answer 1

The correct option is D it would increase the opportunity cost of becoming a broadcaster

Opportunity cost is the value of a factor in its next best use. With an increase in salary for playing basketball, if a player is considering giving up basketball to pursue a career in broadcasting, his opportunity cost of becoming a broadcaster will increase.