You paid $35 for a ticket (which is non-refundable) to see SPAM, a local rock band, in concert on Saturday. Assume that $35 is the most you would have been willing to pay for a ticket. Your boss called, and she is looking for someone to cover a shift on Saturday at the same time as the concert. You would have to work 4 hours and she would pay you $11/hr. The psychic cost to you of working is $2/hr. What is the opportunity cost of going to the concert?

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Dryomys Dryomys · Answer 1 · 2020-02-10T07:41:42+01:00

Answer:

$36

Explanation:

The Opportunity cost refers to the benefit that is sacrificed by choosing some other alternative.

Therefore, the opportunity cost of going to the concert is the loss of money income that he would earned otherwise.

Benefit received from the concert = $35

Hence,

The amount of sacrificed wages is as follows:

= Income form working on Saturday - Psychic cost

= (4 hours × $11/hr) - (4 hours × $2/hr)

= $44 per hour - $8 per hour

= $36

The opportunity cost of going to the concert is $36.