Question

Econ 0103 : Introduction to Macroeconomics Homework Assignment 1 Due Date 19 September 2020 INSTRUCTIONS: This homework has two parts. Answer all questions from the two parts. Part 1: Answer all questions. Circle the correct answer for each question. Each question is worth 0.12 points. 1. Matilda is the CEO of a large marketing company. After paying taxes, her company was left with $18,000,000 of disposable income. She can reinvest this money into her company in infrastructure spending and salary increase, or she can invest it into the stock market. The cost of choosing one over the other is called the cost. a. Production b. Opportunity C. Marginal d. Deductible onsidering how several factors may help her company's productivity. She is considering in human capital. She is also trying to

Answer 1

ANSWER : OPPORTUNITY COST

Opportunity cost is the potential benefits foregone when choosing one option over the other. It is the next best alternative forgone.

In this case Matilda has to choose one among the two options. Either she should invest in infrastructure and salary increase or invest in the stock market. If she choose any one option, she is required to forego the benefits that she might have received on choosing the other option. This is called opportunity cost.

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