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# suppose that you have received \$300 as a birthday gift. you can spend it today or you can put the money in a bank account for a year and earn 5 percent interest. the opportunity cost of spending the money today, in terms of what you could have after one year, is

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## Suppose that you have received \$300 as a birthday gift. You can spend it today or you can put the money in a bank account for a year and earn 5 percent interest. The opportunity cost of spending the money today, in terms of what you could have after one y

Answer to: Suppose that you have received \$300 as a birthday gift. You can spend it today or you can put the money in a bank account for a year and...

Opportunity cost

## Suppose that you have received \$300 as a birthday gift. You can spend it today or you can put the...

Suppose that you have received \$300 as a birthday gift. You can spend it today or you can put the... Question:

Suppose that you have received \$300 as a birthday gift. You can spend it today or you can put the money in a bank account for a year and earn 5 percent interest. The opportunity cost of spending the money today, in terms of what you could have after one year, is:

a) \$0 b) \$15 c) \$305 d) \$315

## Time Value of Money:

The time value of money also referred to as TVM, is one concept that investors need to take into consideration to select the best investment option. The TVM theory implies that the amount of money invested today is always greater in value than the same amount of money invested at any other future date.

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The correct answer is b) \$15.

The opportunity cost is one of the most important concepts in economics. This term can be defined as the benefit lost...

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Opportunity Cost: Definition, Calculations & Examples

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Chapter 57 / Lesson 4

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Opportunity costs are at the center of the economic sphere and govern the cost of every financial process. Learn more about the definition and relative calculations of opportunity cost, explore the relationship between explicit and implicit costs, and apply your understanding with examples.

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## microeconomics exam 1 Flashcards

Start studying microeconomics exam 1. Learn vocabulary, terms, and more with flashcards, games, and other study tools.

## microeconomics exam 1

5.0 1 Review

the overriding reason why households and societies face many decisions is that

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resources are scarce

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when a society cannot produce all the goods and services people wish to have, it is said that the economy is experiencing

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scarcity

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1/61 Created by mrbaldas

### Terms in this set (61)

the overriding reason why households and societies face many decisions is that

resources are scarce

when a society cannot produce all the goods and services people wish to have, it is said that the economy is experiencing

scarcity

economists use the word equality to describe a situation in which

each member of society has the same income

refers to how much a society can produce with its resources

efficiency

refers to how evenly the benefits from using resources are distributed among members of society

equality

a purely free-market economy that operates with no governmental interference is called a

laissez-faire economy

in economics, the cost of something is

what you give up to get it

which of the following is correct concerning opportunity cost?

except to the extent that you pay more for them, opportunity costs should not include the cost of things you would have purchased anyway

suppose that you have received \$300 as a birthday gift. You can spend it today or you can put the money in a bank account for a year and earn 5 percent interest. The opportunity cost of spending the money today, in terms of what you could have after one year, is

\$315

melody decides to spend three hours working overtime rather than going to the park with her friends. She earns \$20 per hour for overtime work. Her opportunity cost of working is

the enjoyment she would have received had she gone to the park

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