Question

Tyrone's boss said that he can come and work for an extra 3 hours this afternoon, but it is optional. Tyrone decided to go to the beach instead. Assuming he makes $14 an hour (after taxes) and his trip to the beach costs him $10 in gas and toll, how much is his opportunity cost to go to the beach?

Answer 1

$4

Step-by-step explanation:

The computation of the opportunity cost for going to the beach is shown below:

= Hourly wages after considering the taxes - the cost of the beach in gas and toll

= $14 - $10

= $4

We simply deduct the cost of beach in gas and toll from the hourly wages so that the opportunity cost to go to the beach could come