Question

It’s Saturday and you’re looking forward to hanging out with friends and having some fun. However, you get two phone calls early in the morning that make you stop and think. First, a friend calls to invite you to an all-day basketball tournament. With tickets, lunch, and dinner, you figure you’ll spend $50. That would put a dent in the money you’re saving for a future goal. Then your neighbors call offering you the opportunity to help paint their apartment. They will pay you $75 for the day of work. What will you do?

Answer 1

Choosing between attending a basketball tournament and painting a neighbor's apartment involves evaluating opportunity cost and personal values. Financial priorities and personal enjoyment both play roles in making the decision.

Step-by-step explanation:

The scenario presented involves making a decision about how to spend a Saturday—either by going to a basketball tournament, which has associated costs, or earning money by painting a neighbor's apartment. This is a typical example of opportunity cost in economics. Once you choose to spend the day at the basketball tournament, you forego the opportunity to earn $75 from painting. Conversely, by choosing to paint, you save and potentially add to your savings goal, but miss out on the enjoyment and social experience of attending the basketball tournament with friends.

When making such a decision, it's important to consider both the financial and personal value of each option. If saving for a future goal is a priority, then earning the $75 may be more beneficial in the long term. On the other hand, if the social experience and enjoyment are more valuable at this point in time, then spending the $50 might be worth it. There is also the alternative of looking for a compromise—perhaps finding a different way to socialize that does not require spending as much money.

Answer 2

Answer with Explanation:

I would forego the all-day basketball tournament because, clearly, I will be spending so much for just a one-day fun. I'm sure there will be other upcoming basketball tournaments I can attend to. So, I will accept my neighbor's offer of helping to paint their apartment because I will be earning $75 and such offer doesn't come every day. Since I also want to enjoy and hang out with friends, I would call a friend to help me in painting the apartment so we could split the payment, which means both of us will have $37.5. In this case, I will not only earn money on Saturday but will also get to enjoy the company of my friend.