Tamara won the lottery and has decided to invest the money in the stock market instead of building a new home at the beach. What is her opportunity cost?

Question

The cost of the lottery ticket

The interest she earns on the money

The time she could spend surfing

The cost of the new home

Answer 1

The opportunity cost in this scenario is the cost of the new home at the beach that Tamara could have built instead of investing in the stock market. By choosing to invest the money, Tamara is giving up the opportunity to have a new home at the beach.