
I think the opportunity cost in this case should be $40 as opportunity cost is the cost of next most valued thing you are giving up.


Thanks Pushpendra, and in case i choose the option of going out with a friend which is valued at $ 40, in that case will the opportunity cost be $60 or $20??


in the question, value of going out with friends is $60
If your question is to choose first option which is of value $40 i.e. going to the beach then the opportunity cost would be $60 i.e. going out with friends, which is the next most valued option you are giving up to go to the beach.


well in terms of "COST VALUE" of opportunity cost, below is the formula, which i have found on one of the website... Opportunity Cost = Return of Most Lucrative Option  Return of Chosen Option (source: http://www.investopedia....ms/o/opportunitycost.asp) Hence, in your case(as per your perspective) most valued option is going out with the friend Therefore below will be the opportunity cost for chosen appropriate options 1.Going out with friend : 0 (Best  selected = 6060) 2. Washing car : 40 (Best  selected = 6020) 3. Going to beach : 20 (Best  selected = 6040) 0 Opportunity cost states that you have chosen best option.. PS: i could not understand inpods formula and that's why had to hunt on google for ans not sure whether formula is correct or what


All participants, do post these queries on Inpods web module. The faculty is very much there to help you all. He will not reply here.
