Asked by Johnny Guittard on Jul 22, 2024
Verified
A car dealership union negotiates a contract that dramatically increases all salesmen's salaries.If one of the salesman is thinking of changing careers to be a hardware salesman,his opportunity cost
A) would not be affected
B) of becoming a hardware salesman would decrease
C) of becoming a hardware salesman would increase
D) none of the above
Opportunity Cost
The cost of forgoing the next best alternative when making a decision, representing the benefits one misses out on when choosing one option over another.
Car Dealership Union
A labor union representing workers within car dealerships.
Salesmen's Salaries
The compensation provided to sales professionals, usually comprising a base salary and potentially including commissions or bonuses tied to performance.
- Uncover and explain the concept of opportunity cost when faced with various choices.
- Acknowledge the importance of opportunity costs in assessing economic profits.
Verified Answer
KP
Karmdeep PurewalJul 23, 2024
Final Answer :
C
Explanation :
The negotiated contract that dramatically increases all salesmen's salaries increases the opportunity cost of leaving the current job as a salesman. Therefore, the opportunity cost of becoming a hardware salesman would increase.
Learning Objectives
- Uncover and explain the concept of opportunity cost when faced with various choices.
- Acknowledge the importance of opportunity costs in assessing economic profits.