Which of the following is the best example of an opportunity cost?
A)The cost of filling up the company car with gasoline.
B)The time incurred in reviewing expense reports of key employees in the company.
C)Taking two days' vacation at the end of the month instead of completing a project for a client.
D)Asking the President of the company for a raise.

Question

Quizplus · Accepted Answer

Opportunity cost is the cost of choosing one option over the other. In this case, taking two days' vacation at the end of the month instead of completing a project for a client is the best example of opportunity cost as the cost of two days of vacation is the opportunity cost of not completing the project. Option A is a direct cost, option B is an indirect cost, and option D is a decision that may have potential costs but not an opportunity cost.

Which of the Following Is the Best Example of an Opportunity