Question

Please choose one of following answers that are in quote

What is the opportunity cost in this scenario?
Harry has been very busy at work for the past two weeks. He has been working weekends too. Finally, he is going to get a weekend off. "Originally, he planned to paint his apartment that weekend." "He also considered going fishing for the weekend." "But then his parents called and asked him to come for dinner because it has been a while since they have seen each other."

"Later on, his friend Theo informed him about a surprise birthday party for another friend." Theo plans to reserve a room at a restaurant for the celebration, with the cost to reserve the room split between Theo, Harry, and three other friends.

Now Harry is confused about what he should do over the weekend. He decides that, for him, the most important commitments are going over to his parent's house and attending his friend's birthday party. In the end, Harry decides to see his parents.

Answer 1

it would be better to go the his parents house so it would be cheaper, probably around $10

Step-by-step explanation:

Answer 2

In this scenario, the opportunity cost for Harry is the value of the next best alternative that he foregoes by choosing to see his parents instead of engaging in other activities.

• The original plan was to paint his apartment. The opportunity cost here would be the satisfaction and benefits he would have gained from having a freshly painted apartment.

• Alternative Option 1: Harry also considered going fishing. The opportunity cost of visiting his parents instead of going fishing would be the enjoyment and relaxation he would have experienced while fishing.

• Alternative Option 2: Theo informed him about a surprise birthday party. The opportunity cost of choosing to see his parents instead of attending the birthday party would be the enjoyment and socializing he would have experienced at the party.

By choosing to spend time with his parents, Harry is giving up the benefits and satisfaction associated with painting his apartment, going fishing, and attending the birthday party. The opportunity cost is subjective and depends on Harry's preferences and priorities. In this case, he values spending time with his parents as the most important commitment, and that is what he chooses to do over the weekend.