Hello, If you never mind, I want the solutions for this question.. the due time

ID: 1131942 • Letter: H

Question

Hello,

If you never mind, I want the solutions for this question..

the due time is after 6 hours please do not late more than 6 hours ..

question:

Ace alexia plays professional tennis for a living, but in spite of her big first serve, she is not very successful. during the last year, Ace could have earned $75,000 as a tennis instructor at the Atlanta Tennis Club. She would have spend $7,000 on meals, paid rent on a condo in Atlanta at $800per month, and made car payments of $300 per month. Instead, she remained a pro and won $100,000 in prize money in various tournaments around the country. In doing so, she spent $12,000 on transportation and lodging and paid her coach/trainer $10,000 for the year. She also spent $7,000 on meals, paid rent on her condo in Atlanta at $800per month, and made the payments on her car of $300 per month.

Ace’s Opportunity cost of playing tennis last year was?

Explanation / Answer

The opportunity cost is the next best alternative forgone for selecting an option among the alternatives.
The two opportunities to earn for ACE are:
1. Tennis instructor - $75,000
2. Pro-$100,000

Tennis instructor

Pro

Earnings

75000

100000

Meals

7000

Rent

800

Car payments

300

Transportation

12000

Trainer

10000

Net savings

66900

69900

Now looking at the net savings the alternative Pro has more savings of $3000 more than tennis instructor. So by opting Pro and winning the tournaments, Ace is forgoing the cost of 66900 and hence the opportunity cost is $66900