Tiger Woods dropped out of Stanford University to pursue a career as a professional golfer. At the time he left the university, he was majoring in finance and would have been employable as a stock broker or financial analyst earning $150,000/year. When he turned pro, he immediately signed an endorsement contract with Nike for $20 million. a. What was Tiger's opportunity cost for becoming a professional golfer

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Aussie

Business

5 April, 00:38

Tiger Woods dropped out of Stanford University to pursue a career as a professional golfer. At the time he left the university, he was majoring in finance and would have been employable as a stock broker or financial analyst earning $150,000/year. When he turned pro, he immediately signed an endorsement contract with Nike for $20 million. a. What was Tiger's opportunity cost for becoming a professional golfer

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Memphis Dickson · Answer 1

The opportunity cost is $150,000/year.

Explanation:

Tiger Woods dropped out of Stanford University to pursue a career as a professional golfer.

At the time he left the university, he was majoring in finance and would have been employable as a stockbroker or financial analyst earning $150,000/year.

When he turned pro, he immediately signed an endorsement contract with Nike for $20 million.

The opportunity cost of a decision is the value of the second-best alternative that has been sacrificed in order to take up the decision.

Every economic decision involves some opportunity cost because of the scarcity of resources. In the given example, time is a scarce resource.

The opportunity cost of becoming a professional golfer is the $150,000/year that he could have earned if he majored in finance.