Opportunity Cost of Investments

Question

Jim invests $1,000 in government bonds. Alternatively, he could have invested $500 in a small startup. Which of the following best describes his opportunity cost?

Accepted Answer

For every dollar invested in government bonds, the opportunity cost is 50 cents of investment in the startup.

Answer

For every dollar invested in government bonds, the opportunity cost is one dollar of investment in the startup.

Answer

For every $500 invested in government bonds, the opportunity cost is one dollar of investment in the startup.

Answer

For every $1,000 invested in government bonds, the opportunity cost is one dollar of investment in the startup.