Opportunities and Cost

Opportunities and Cost - 2. The university has built a new...

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Opportunities and Costs Robert McGill BA 201 Microeconomics 12 March 2011
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Opportunities and Costs 1. You plan a major adventure trip for the summer. You won’t be able to take your usual summer job that pays $6,000, and you won’t be able to live at home for free. The cost of your travel on the trip will be $3,000, film and videotape will cost you $200, and your food will cost $1,400. What is the opportunity cost of taking this trip? The financial cost of taking this trip is $10,600.00 ($6,000 in lost income, $3,000 in travel cost, $200 in film, and $1,400 in lodging). The opportunity cost of taking this trip is subjective and can only be determined by the person making the decision and his/her valuation of the best forgone alternative.
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Unformatted text preview: 2. The university has built a new parking garage. There is always an available parking spot, but it costs $1 per day. Before the new garage was built, it usually took 15 minutes of cruising to find a parking space. Compare the opportunity cost of parking in the new garage with that in the old parking lot. Which is less costly and by how much? The financial cost of the parking garage is $365 per year. The cost in time before the parking garage was built was 91 hours and 15 minutes per year. Again the answer of which option is least costly and by how much is entirely subjective to how the individual in question values his time. I would personally value 91.25 hours of my life significantly higher than $365 dollars....
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Opportunities and Cost - 2. The university has built a new...

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