Ask Question
10 December, 10:06

Suppose, as your birthday gift, your best friend give you a 4-day general admission ticket for Bonnaroo 2018 with a market value of $554.50. What is your opportunity cost of going to Bonnaroo this year using the free ticket?

+5
Answers (1)
  1. 10 December, 13:51
    0
    Cost of 4 days time: In terms of earnings sacrifised from those working days, or any qualitative value of that time.

    Explanation:

    Opportunity Cost is the cost of next best alternative sacrifised while choosing an alternative.

    It might be material, immaterial.

    Eg1: Working at Job1 with salary 10000, having other job option with salary 8000. Opportunity cost of Job1 is Job2 salary. Eg2: Me preferring Chapati over rice, opportunity cost of consuming Chapati is rice' satisfaction.

    Eg 1 has material (monetary) opportunity cost i. e salary. Eg 2 has immaterial opportunity cost i. e satisfaction.

    Admission ticket for Bonnarro would have had opportunity cost = its price i. e $554.50 as the amount sacrifised to get that. However: as given the ticket is gifted free; the opportunity cost of that is 4 days time sacrifised to attend it. The value of that sacrifised time may be in form of : - earnings lost from those 4 working days sacrifised (material); or 4 days time to be spent with family sacrifised (immaterial).
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Suppose, as your birthday gift, your best friend give you a 4-day general admission ticket for Bonnaroo 2018 with a market value of ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers