Suppose that you have saved $100 . You can spend it today or you can put it in your savings account for a year and earn 5% interest. What is the opportunity cost of spending the money today?
What will be an ideal response?
If you put the money in your savings account, you will have $105 to spend next year on the item (or items) of your choice. Thus, the opportunity cost of spending the money today is the enjoyment you give up by not having the $105 to buy something next year.
Economics
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