Question

After the​ concert, for which you and your friend paid​ $100 each to get a​ ticket, is over and you and your friend are traveling​ home, you discuss how each of you might otherwise have used the four hours devoted to attending the concert. The four hours could have been used to​ study, to watch a sporting event on​ TV, or to get some extra sleep. Your friend decides that if she had not spent four hours attending the​ concert, she would have chosen to​ study, and you reply that you otherwise would have watched the televised sporting event.

The relevant opportunity costs for you and your friend for allocating four hours to attending the concert are ______

Answer 1

The opportunity costs for attending the concert are the alternative activities that could have been chosen. Your friend's opportunity cost is the potential knowledge and preparation from studying, while your opportunity cost is the entertainment from watching the sporting event.

Step-by-step explanation:

The relevant opportunity costs for you and your friend for allocating four hours to attending the concert are the alternative activities that you both would have chosen if not attending the concert. In this case, your friend would have chosen to study, while you would have chosen to watch a televised sporting event. The opportunity cost for your friend is the potential knowledge and preparation she could have gained from studying, while your opportunity cost is the entertainment and enjoyment you would have gotten from watching the sporting event. Both of these opportunity costs represent the benefits or values that are lost when choosing one option over another.