What are the monetary, non-monetary, and opportunity costs of each of these jobs? Job A. This job involves writing advertisements and creating art to go along with the text. It pays well, though advancing in this field takes many years. The employer tells you that you are likely to work a lot of overtime hours. The office is located far across town, involving a long bus ride or drive. The people at the office seem very nice. The work atmosphere is formal, as is the dress code. Job B. This job involves filling out and filing paperwork. The entry-level pay is low, but there are many opportunities within the company. The employer tells you that the company prefers to "promote from within," or fill vacant jobs by promoting people who already work at the company. The building is a short bus ride, bike ride, or walk from where you live. The people at the office are friendly and helpful, and the whole office has a casual atmosphere.

Choosing lower-paying Job B involves a monetary cost, plus Job A is more creative, so there's also a non-monetary cost. Job A's overtime is a monetary (reduced pay per hour worked) and opportunity cost, because you could be socializing during those overtime hours. Job A's longer commute is a non-monetary and opportunity cost, because you will need to wake up earlier. Job A's more formal atmosphere is a non-monetary cost, as it might be more stressful at Job B.

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For the purpose of this answer, let’s assume that the employee is choosing between the two jobs and not analyzing each job independently. One benefit of Job A is the higher starting salary. Choosing Job B over Job A involves a monetary cost, plus Job A is more creative, so choosing Job B involves a non-monetary cost also.

However, Job A does not provide the same prospects for advancement as Job B. With Job A, "advancing in this field takes many years," whereas with Job B, despite the low entry-level pay, there are many opportunities within the company and the employer likes to "promote from within."

This difference implies a monetary cost. We really need more information to make an informed determination. Taking Job A generates higher income initially, but could it be that Job B would result in higher pay within three years? It is unclear, but this is a monetary cost associated with the two jobs, as it pertains to the salary.

With Job A, you are likely to work many overtime hours. This is both a monetary cost and an opportunity cost. It is a monetary cost because the implication is that you will not receive overtime pay. Therefore, to compute your actual hourly wages, you need to take your weekly salary and divide by the total number of hours worked each week. You might find that the per-hour rate is not that different at Job B.

This is also an opportunity cost. You could be socializing with your friends during those times when you are required to put in overtime hours.

With Job A, the commute will be longer compared to Job B, where the building is within a short distance of where you live. This implies a non-monetary cost and an opportunity cost. You will spend more time commuting to Job A, so you will invest more of your time. There is also an opportunity cost, because presumably you could sleep later and still get to Job B on time.

The people at both jobs are "nice" or "friendly," so that is neutral. However, the work atmosphere is formal at Job A, and so is the dress code. At Job B, the environment and dress are more relaxed. These are non-monetary costs. It might be more stressful to work at Job A, which is important to incorporate into the cost-benefit analysis even if it cannot be quantified in monetary terms. Moreover, there is probably some associated monetary cost as well, because you will probably need to purchase more work clothes for Job A, while you could wear your everyday clothes to Job B.

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To answer this question, let's first look at the different types of costs in your question. Monetary costs are the things associated with the job on which you must spend money. Monetary costs could include a new wardrobe, transportation, additional training, or maybe supplies you are required to provide for yourself.

Non-monetary costs are the things that cost you personally, but not your bank account. Non-monetary costs are measured in units other than money. These costs could be time, convenience, or even effort.

The final cost in your question was opportunity cost. An opportunity cost basically means evaluating what you miss out on because of what you choose to do, or what else you could be doing with your time.

Looking at the two jobs that you described, Job A's monetary costs would be that you would spend more on transportation to/from work and that you would potentially need new clothing to fit the office dress code. Job A's non-monetary costs would be time on a couple different levels. First of all, it would take you longer to commute to Job A. Secondly, it takes you more time to advance within the company. The commute could also fall under convenience as a non-monetary cost because it takes more to get yourself to work on time. Finally, Job A has some opportunity costs. These costs would be what you miss out on while you are traveling to/from work as well as what you miss while you are working overtime. This could be time with family, friends, or enjoying a hobby.

For Job B, the monetary costs still exist, but they may be lower than those of Job A. With the less formal dress code, the new clothing cost may be lowered. Also, because Job B is closer, it would not cost as much to commute to/from work. The non-monetary cost for Job B still could be time commuting, although it would be lower than Job A's. Because Job B's work seems to be more basic than Job A's, you could say that a non-monetary cost of Job B could be boredom/lack of interest with your work. Finally, the opportunity cost for Job B would be the financial differences. Job A pays more and allows the chance for overtime (which, if it is paid overtime, could pad your paycheck). Because you do still have some commute to work, Job B could also have an opportunity cost of time better spent (on other activities rather than commuting).

All jobs have monetary, non-monetary, and opportunity costs. Weighing them out carefully can help you decide which job is the best choice for you!

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Monetary costs are the costs that are involved in a job that can be expressed in terms of dollars and cents.  There are not very many such costs for either of these jobs.  The monetary costs involve clothing and transportation.  In Job A, there will be relatively high monetary costs since it is far from where you live and the dress code is formal.  Job B will be cheaper both in terms of transportation and clothing.

Non-monetary costs are costs that cannot be expressed in terms of dollars and cents.  These are things like the time that is spent in getting to the job.  Clearly, the non-monetary costs will be higher for Job A because it is far from where you live.  You might also say that the non-monetary cost will be higher because it will take longer to move up the corporate ladder.  Job B has the non-monetary cost of being less interesting in terms of the work you will be doing.

Opportunity cost is the value of what you could be doing instead of doing the thing that you chose to do.  There are a number of opportunity costs involved here.  For Job A, there is the opportunity cost of all the things you could be doing instead of commuting to the job.  There is the opportunity cost of not being able to do various sorts of fun activities during the time you are working overtime.  For Job B, there is the opportunity cost of not getting paid as much. 

Thus, each job has its own set of costs.

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