Question:easy

Which of the following would not be considered an opportunity cost of paid employment?

Show Hint

Separate what you give up from what you actually pay out of pocket.
  • Education
  • Self-employment
  • Leisure
  • Transportation costs of commuting to work
Show Solution

The Correct Option is D

Solution and Explanation

Opportunity cost and explicit cost are two different ideas that this question is testing. Explicit costs are actual cash payments made because of a decision, while opportunity cost is what you give up by not choosing an alternative. Education, self-employment and leisure are all things a person could have done instead of taking a paid job, so foregoing them counts as opportunity cost. Commuting expense, however, is money spent as a direct result of going to work, similar to any other job-related expense, so it belongs to explicit cost rather than opportunity cost. \[\boxed{\text{Transportation costs of commuting to work}}\]
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