What does opportunity cost represent when choosing between two job offers with different salary growth trajectories?

• A. The foregone cumulative earnings from the rejected offer over the time horizon.
• B. The difference in benefits between offers.
• C. The tax impact of salary vs bonus.
• D. The cost of relocating.

Answer: (C)

Opportunity cost is the value of the best alternative you give up when you make a choice. In choosing between two job offers with different salary growth trajectories, the key idea is not just the starting pay but the total earnings you would accumulate over a future period. The opportunity cost, therefore, is the foregone cumulative earnings from the rejected offer over the chosen time horizon. Put differently, if you accepted the slower-growth option, the money you would have earned from the faster-growth offer (summed across the period you care about) represents the cost of not choosing that alternative. Other factors like distinct benefits, taxes, or relocation costs matter for the overall value, but they are separate considerations from the opportunity cost itself.