ATTACHED IS THE ASSIGNMENT. DO NOT DO ASSIGNMENT. THIS IS JUST FOR YOU TO SEE WH

Question

ATTACHED IS THE ASSIGNMENT. DO NOT DO ASSIGNMENT. THIS IS JUST FOR YOU TO SEE WHAT IS GOING ON. I NEED HELP ANSWERING THE QUESTIONS IN THE REPLY SECTION.

REPLY SECTION.

1. I have 3 kids so whenever I get paid I have to choose between taking them out to eat/game rooms or buying them clothing or shoes. I always pick to buy them clothing and shoes because that's really what they need. 2. The opportunity cost was not going out to have fun with my kids. The benefit of my decision is my kids are able to have the clothes and shoes they desire. 3. If I was the owner I would invest the $5,000 into stock and sell it but I would wait over time(1 year) the money would increase so therefore, I could sell it for $15,000. 'The opportunity cost would be determined when I sell the stock in that year and would be difference between the $15,000 and the price I would have received if I would have sold the stock then. Opportunity Cost is something that as to be given up in order to obtain something else. Is everything with opportunity cost have to be bad? For instance, you always have to put aside something you don't need vs something that is more important to you?

NEED HELP ANSWERING THESE TWO QUESTIONS IN DETAIL PLEASE.

Opportunity Cost is something that as to be given up in order to obtain something else. Is everything with opportunity cost have to be bad?

For instance, you always have to put aside something you don't need vs something that is more important to you?

Explanation / Answer

The opportunity cost of $5000 investing in stock is not what you have mentioned. This 5000$ might be used to invest in raw materials or machinery or any other use of the money.Thus the opportunity cost of investing in stock is that you are giving up investment in raw materials or machinery or any other items.

Opportunity cost is not about bad. It is about preferences. Suppose there are 2 choices that you can take. You rank them in terms of preference and chose the most preferred one. The opportunitycost of choosing this is foregoing the second best alternative. This second best alternative is not necessarily a bad.

Yes it is all about the choice you choose.It is all about ranking and preferences. The choice that is not taken is the opportunity cost of the choice that is taken. The most preffered one is taken as a choice while the second best alternative is the opportunity cost or the choice that has to be given up.

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