Frank Franklin is the star quarterback for a professional football team. Last year he was paid $600,000 under his rookie contract. Franklin's new contract pays $10,000,000 per year. The team's best alternative to not resigning Franklin is to use the $10 million to obtain 2 top notch offensive lineman and a replacement starting quarterback. The opportunity cost to the team for Franklin's new contract is
--- $10,000,000
--- 9,400,000
--- 2 good offensive lineman and replacement quarterback
--- $10,000,000 and the lineman
Answer
The correct answer is (c) 2 good offensive lineman and replacement quarterback
Opportunity cost is the alternative they have sacrificed in order to choose the option he have chosen. Here suppose he have chosen the alternative to resigning Franklin. For that he have sacrificed next best alternative of to obtain 2 top notch offensive lineman and a replacement starting quarterback. Hence opportunity cost to the team for Franklin's new contract is 2 good offensive lineman and replacement quarterback.
Frank Franklin is the star quarterback for a professional football team. Last year he was paid...
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