Question

Rahul have three options of a job, offering him a salary of $Rs.20,000,Rs.25,000$ and $Rs.30,000$ respectively. What is Rahul's opportunity cost?

Answer 1

Opportunity cost of production of a commodity refers to the cost which the producer has to sacrifice in terms of the next best alternative which could be produced out of that cost in order to produce every unit of the given commodity. So when Rahul select the job offering 30,000 rupees, he will sacrifice 25,000 of another job and when he selects job offering 25,000 rupees, he will sacrifice 20,000 rupees which becomes the opportunity cost of the following selections.