Microeconomics: Principles, Applications, and Tools (8th Edition)

Published by Prentice Hall
ISBN 10: 0-13294-886-9
ISBN 13: 978-0-13294-886-9

Chapter 2 - The Key Principles of Economics - Exercises - 2.1 The Principle of Opportunity Cost - Page 43: 1.7

Answer

\$86,000

Work Step by Step

Since Jen gave up another job to run the shop, her \$40,000 salary is part of the opportunity cost of running the business. Jen could sell the building and earn interest on the sale price. That interest is part of the opportunity cost. $I=200000\times0.08=16000$ Total cost=$40,000+16000+30000=86,000$
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