2. Patrice is thinking about opening a caf. He estimates that it would cost 500 000 per...

2. Patrice is thinking about opening a café. He estimates that it would cost €500 000 per year to rent the premises, buy the equipment to make hot drinks and snacks and to buy in the ingredients. In addition, he would have to leave his €50 000 per year job as an accountant.

a. Define opportunity cost.

b. What is Patrice’s opportunity cost of running the café for a year? If Patrice thought he could sell €510 000 worth of coffee and snacks in a year, should he open the café?

Explain your answer.