You own a 10-acre blueberry farm. You could farm the land yourself or rent it out for $7,000 per year. Another option is to sell the land this year at its current market price of $80,000. The price of the land next year will be $78,000. If you sell it, your group has an investment opportunity from which you expect to make a return of 6 percent per year. What is the opportunity cost to you of using the land to grow blueberries for a year?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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You own a 10-acre blueberry farm. You could farm the land yourself or rent it out for $7,000 per year. Another option is
to sell the land this year at its current market price of $80,000. The price of the land next year will be $78,000. If you
sell it, your group has an investment opportunity from which you expect to make a return of 6 percent per year. What is
the opportunity cost to you of using the land to grow blueberries for a year?
O a. $2,000
O b.
$4,800
OC. $5,000
d. $9,800
Transcribed Image Text:You own a 10-acre blueberry farm. You could farm the land yourself or rent it out for $7,000 per year. Another option is to sell the land this year at its current market price of $80,000. The price of the land next year will be $78,000. If you sell it, your group has an investment opportunity from which you expect to make a return of 6 percent per year. What is the opportunity cost to you of using the land to grow blueberries for a year? O a. $2,000 O b. $4,800 OC. $5,000 d. $9,800
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