Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 1 - Part I - Ten Principles of Economics - Problems and Applications - Page 18: 4


If you spend money instead of saving the money you are giving up the opportunity to earn interest on the money. An item that you spend $100 for has an opportunity cost of $105$ if you give up the opportunity to earn $5 in interest.

Work Step by Step

The cost of a good or service includes not only its price but also any other benefit that you give up in order to obtain the good or service.
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.