Bubba is a shrimp fisherman who used $2,000 from his personal savings account to buy a boat and equipment for his shrimp business. The savings account paid 2% interest. What is Bubba's annual opportunity cost of the financial capital that he invested in his business?
A)$20
B)$40
C)$200
D)$400

Question

Quizplus · Accepted Answer

The opportunity cost is the interest Bubba would have earned if he had left the $2,000 in his savings account. At 2% interest, the opportunity cost is $2,000 * 0.02 = $40.

Bubba Is a Shrimp Fisherman Who Used $2,000 from His