Opportunity Cost

Opportunity Cost - Rebecca Stein rstein2@econ.upenn.edu 541...

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1 Case 1.1: The Hong Kong Hilton Why was it profitable to demolish a profitable Hong Kong hotel? The hotel was profitable. It was expected to be profitable in the future. Breaking the management contract was costly. Case 1.1 : The answer
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2 CHAPTER 1: Avoid Pitfalls! Opportunity Cost = value of the best foregone alternative to any decision All actions imply an opportunity costs Opportunity costs = true economic costs Case 1.2 : How much does it cost to go to Penn? Tuition and fees: 53,250 Undergraduate expense budget
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3 Case 1.2 : Is this the true cost? All actions opportunity costs Logistics: https://courseweb.library.upenn.edu/
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Unformatted text preview: Rebecca Stein rstein2@econ.upenn.edu 541 McNeil, Thursdays, 2:00 to 4pm. 4 Case 1.3: MBA enrollment and economic cycles What effect will the current recession have on MBA applications & enrollment? Case 1.4: Having kids How much does it cost to raise a child? 5 Case 1.4 : A few facts 2009 estimate: annual child-rearing expense estimates ranged between $11,650 and 13,530 for a child in a two-child, married-couple family in the middle income group. USDA estimates on Child Rearing Case 1.4 : Is this the true cost? All actions opportunity costs...
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Opportunity Cost - Rebecca Stein rstein2@econ.upenn.edu 541...

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