Suppose that a university decides to spend $1 million to upgrade personal computers and scientific equipment for faculty rather than spend $1 million to expand parking for students. This example illustrates:A. distorted priorities. B. opportunity costs. C. increasing opportunity costs. D. productive efficiency.

Opportunity cost

Explanation:

Suppose that a university decides to spend $ 1 milion to upgrade personal computers and scientific equipment for faculty rather than spend $ million to expand parking for students. This example illustrates opportunity costs.

Opportunity cost refers to the cost shifting one opportunity to another opportunity or availing one opportunity in terms of another.

Formula of Opportunity cost is:

Opportunity cost = Total Revenue - Economic Profit

Or

Opportunity cost = What one sacrifice / What one gain

In Opportunity cost we chose one thing or option over the cost of another thing or option. Opportunity cost places a important role in economic theory.

As it tell us that people can choose only one thing not the both things at the sane time.