Question

You have two options for how to spend the afternoon. You can either go see a movie with your roommate or work as a tutor for the Math Department. From experience, you know that going to see a movie gives you $20 worth of enjoyment, and with your student discount, a movie ticket only costs $12. If you spend the afternoon working as a math tutor, you will get paid $45. On a typical day, you wouldn't be willing to spend the afternoon working as a math tutor for less than $35. What is your opportunity cost of seeing a movie this afternoon

Answer 1

Answer: $22

Step-by-step explanation:

Opportunity cost may be explained as the 'cost' or 'loss' incurred by deciding to pick or choose an alternative over another.

From the context above, Cost incurred may be in two forms :

The amount paid on the chosen alternative + the cost forgone on the option ignored.

By choosing to go see a movie, $12 was paid, that is the opportunity cost for choosing to see a movie while ignoring working as a math tutor.

If he had chosen to work as a math tutor, an additional $10 would have been earned, $45 - $35 = $10

Total opportunity cost = $(12 + 10) = $22

Answer 2

Opportunity cost of seeing a movie this afternoon is $45

Step-by-step explanation:

Opportunity Cost can be defined as lost contribution

The Contribution lost when the choice of seeing a movie is :

Payment that would have been received as a tutor of $45