Question

1. Suppose there are two identical gold bars that you own. The only difference between them is how you acquired them. One bar was won as a prize, the other you purchased.
   
   1. What is the difference in the cost of retaining ownership in the two bars? Explain. (hint: recall the distinction between accounting and opportunity costs).
      
   2. Will there be any predicted difference in the use of the bars? Explain.

Answer 1

Ans

1 oppurtunity cost of gold bar that I won is less since i will not sell it. it shows my talent. So I will never use it in any other use. On the other hand the gold that I purchased could be sold and the resulting money can be used for other purpose

2 As said above the piece that I won will be mostly used as a piece of my achievement and will be thus shown to other people. However the gold hat I purchased will be used for personal use or will be sold so that I can use the resulting money in other uses