No.18
You won a free ticket to see a Beatles concert (which has no resale value). The Rolling Stones are performing on the same night and is your next-best alternative activity. Tickets to see the Rolling Stones cost $40. On any given day, you would be willing to pay up to $50 to see Rolling Stones. Assume there are no other costs of seeing either performer. Based on this information, what is the opportunity cost of seeing the Beatles?
A) $0
B) $10
C) $40
D) $50
Keep in mind, even real economists get this question wrong. I changed the name of the bands playing so you can't easily look up the answer.
No.22
10 bucks
No.37
>>18http://marginalrevolution.com/marginalrevolution/2005/09/opportunity_cos.htmlThe answer is 10 bucks, best alternative is Rolling Stones, benefit is 50$, cost is 40$, net revenue is 10$.
I would have guessed B) on a hunch but I honestly did not understand the concept well, along with the other 78% of top economists which were polled and got it wrong.
I guess what confused me was my inability to translate "willing to pay 50$ on seeing Rolling Stones" to "tickets to see Rolling Stones are worth 50$." That and I guess we're assuming that on any given day I would pay nothing to see the Beatles? Or am I misconstruing that?
No.41
Isn't the opportunity cost of seeing the Beatles 0, or A, because the ticket is free. Or the opprtunuty cost of the rolling Stones, at 40 bucks, be at 40, because the opprunity to see them, over a similar form of entertainment was 40 dollars.
I'm more used to looking at opportunity costs in terms of earnings, where I can work a night and make 88 dollars, or I can stay home and Jack off. The cost of beating it was 88 dollars, but my net enjoyment of life went up so my "money" was well spent, though I'd probably be happier with the 88 dollars.
For the concert scenario, free ticket for a band I like just a little less than the rolling Stones? I'm saving 40 dollars, if anything.
How dumb am i?
I still think it's A
No.47
>>18It's B, $10.
The opportunity cost of seeing the Beatles is the total value of everything you would have to sacrifice in order to go to that one; specifically, that is, the value to you of seeing the Rolling Stones. That value is $10 - $50 that seeing the concert would be worth to you minus the $40 you would have to pay for a ticket.
No.60
>>41Normally, you are willing to pay 50 dollars to go see the rolling stones, but you'll be able to save 10 dollars because tickets are 40 dollars. If you choose to go to the beatles concert instead of the rolling stones, you are giving up the benefit of saving 10 dollars on the rolling stones ticket. Therefore the opportunity cost of seeing the beatles instead of the rolling stones is 10 dollars.
No.80
>On any given day, you would be willing to pay up to $50 to see Rolling Stones
>implying you can meaningfully quantify the joy of seeing mick jagger live
This is why no-one takes economists seriously.
No.85
>>80Whose implying that? I've never heard of anyone who has said that.