Question

A) Mohan decides to use the train to get to work rather than driving each day. The train
fare each month will be Rs.350. After one month, he calculates that he is spending Rs.250
less on petrol and about Rs.25 less on maintaining her car.
What is opportunity cost and what is the opportunity cost of using the train?

Answer 1

Answer:

opportunity cost is cost forgone by availing another opportunity

Explanation:

or cost of shifting resources from one use to another.

in above question he shift resource from car to train so cost he forgone ie 250+25=275 is opportunity cost

Answer 2

Answer:

cost of using train pm=R•350

cost using car pm=Rs.250+25

opportunity cost of using train pm=350-275

it will be cost of using train Rs.75