An unemployed person Ramesh is looking for a job . Ramesh received 2 job offers: one for Rs. 20000 from ICICI Bank and the other offer of Rs.15000 from HDFC Bank. What is the opportunity cost for Ramesh, if he accepts the offer of ICICI Bank?
Answers
Answer:
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Explanation:
The answer is Rs 15,000
Answer:
The opportunity cost for Ramesh is 15,000rs if he accepts the offer of 20,000rs. Hence, the answer to the abovementioned question is 15,000.
Explanation:
The opportunity cost of a derived demand option in microeconomic theory is the value or benefit given up by involving in that activity versus engaging in an alternative activity. Simply put, if we choose one activity, we forfeit the opportunity to engage in another. The optimal activity is the one that, net of opportunity cost, provides the highest return when compared to all other activities.
The difference between the anticipated returns of each option is the formula for calculating an opportunity cost. An opportunity cost is the next best alternative to a specific option that has been or is about to be executed. It can be an undertaking, an overseas investment, or a specific option chosen by a collective of individuals or a single individual for business or personal reasons. It is a purely theoretical assumption that is frequently measured to determine the worth of the actual decision made.
In the abovementioned case,
- Ramesh has two job offers. One is paying 20,000rs and the other is giving him 15,000rs.
- Ramesh takes the 20,000rs job.
- The next best opportunity for him would be the 15,000rs offer.
Hence, we can conclude that the opportunity cost for Ramesh is 15,000rs if he accepts the offer of 20,000rs.
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