Elda is a recent fashion graduate. She started her own apparel store with an investment of $300,000. In the first year she made a profit of $60,000. If she had taken up a job as a fashion editor for a magazine, she would have earned $50,000 as salary per year. Also, she could have invested her capital, $300,000, in treasury bonds and earned an interest of $12,000. Thus, the amount $62,000 ($50,000 + $12,000) would be Genevieve's: A. Social cost.
B. Break-even price.
C. Reservation price.
D. Opportunity cost.

D. Opportunity cost.

Explanation:

Since she could have taken a job and would have earned $62,000, this represents opportunity cost, lost due to the decision of starting her own apparel store. Opportunity cost is the cost of foregone alternative. Therefore, if there are two alternative X and Y, and alternative Y has a benefit of $M, then by choosing alternative X, the decision-maker is giving up a benefit equal to $M, which is the opportunity cost associated with choosing alternative X over alternative Y.

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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