Opportunities and Costs

Opportunities and Costs - 1 Opportunities and Costs 1. You...

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1 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? According to Investopedia, opportunity cost means “the cost of an alternative that must be forgone in order to pursue a certain actions. Put another way, the benefits you could have received by taking and alternative action,” (Investopedia.com, 2011). By using this definition of opportunity cost the calculations of this trip should be fairly reasonable to understand after the financing for it is calculated. If we have $3,000 for traveling, $200 for videotape, and $1,400 for food, we have $4,600 that is already out of pocket. In the question it shows that cost of living is not free for the summer, so if we calculate approximately $600 dollars for rent per month, which is the average renting
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This note was uploaded on 03/05/2012 for the course MICRO 101 taught by Professor Seely during the Spring '12 term at Grantham.

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Opportunities and Costs - 1 Opportunities and Costs 1. You...

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