Peter is looking for a job. He has been offered of 40,000 per month and another in a private  bank at a salary of 50,000. If he chooses to work at the private bank, what would be his opportunity cost.

₹40,000

The correct answer is option (1) : ₹40,000

Opportunity cost: This is the value of the next best alternative that is foregone when making a decision. In this case, if Peter chooses to work at the private bank with a salary of ₹50,000, he is foregoing the job offer of ₹40,000 per month. Therefore, his opportunity cost is the salary he is giving up, which is ₹40,000.