Question

Suppose Jon Stewart of the​ "Daily Show" makes an annual income of​ $1,000,000. If he quit his television job and went into producing he could make​ $400,000 per year. Jon​ Stewart's opportunity cost as a producer is

Answer 1

Answer:

$1,000,000.

Explanation:

Opportunity cost is the cost of the other alternatives forgone when one option is chosen over other options. It is known as economic cost.

By choosing to work on tv, Jon Stewart forgoes the choice of been a producer and earning $400,000. Therefore, his opportunity cost is $400,000.

If Jon Stewart chooses to be a producer, he would forgo the opportunity to work on the tv and earn $1 million. His opportunity cost would be $1 million.

I hope my answer helps you