Question

For each of the five situations below, suggest the opportunity (real) cost of the person’s choice. In the text box, describe the choice and opportunity cost of each situation. Use a sentence that begins “When…chose the…, his/her opportunity cost was…” Be prepared to explain your answer if I do not belive it's clear enough for full credit.
1. Tonya had a hard time deciding between the Big Burger and the Crispy Chicken sandwiches, her two favorites. She chose the chicken because she had more recently had a burger. What was her opportunity cost? (20 points)

2. Jimmy went to a candy store. He really wanted chocolate nut clusters, jelly beans, and licorice. He only had enough money buy one of them. He can’t eat chocolate or nuts because of an allergy. He decided to buy some licorice. What was his opportunity cost? (20 points)

3. Mary was shopping in a clothing store. She had $100 to spend. She found three items she liked: $99 for a pair of shoes, $98 for a jacket, and $96 for a dress. After over an hour of shopping, she decided to buy the jacket for $98. What was her opportunity cost? (20 points)

4. Joe was shopping for a truck. He has looked at similarly priced Ford, Chevrolet, Toyota, and Ram models. After a lot of thought, he narrowed it down to either the Ford or the Chevrolet. He selected the Ford because he liked the interior a little better. What was his opportunity cost? (20 points)

5. The city was building a new park. There was only enough money in the budget to include new tennis courts, a wading pool, a music stage, or a parking lot. At the public hearing, many of the people wanted more parking. City Council voted to build the music stage after narrowing it down to either the stage or the wading pool. What was the city’s opportunity cost? (20 points)

Answer 1

1. When Tonya chose the chicken sandwich, her opportunity cost was the burger.

2. When Jimmy chose the licorice, his opportunity cost was the jelly beans. (It's the jelly beans since the nut clusters are not included in the next alternative because of his allergies to it.)

3. When Mary chose the jacket, her opportunity cost was either the dress or the shoe, whichever was her next best alternative. (The statement does not give enough information to identify her opportunity cost. It could not be both since an opportunity cost is the next best alternative and not all alternatives.)

4. When Joe chose the Ford truck, his opportunity cost was the Chevrolet.

5. When the city council chose to build the music stage, their opportunity cost was the wading pool. (The parking lot which people would have wanted is not considered because we are talking about the City Council's opportunity cost.)

Answer 2

1. When Tonya chose the chicken, her opportunity cost was eating the burger. 
2. When Jimmy chose the licorice, his opportunity cost was buying the jelly beans. The chocolate nut clusters are not considered because, since Jimmy is allergic, he wouldn't be able to buy them in any circumstance. 
3. When Mary chose the dress, her opportunity cost was buying the jacket and the shoes. 
4. When Joe chose the Ford, his opportunity cost was buying the Chevrolet. 
5. When the city chose the wading pool, its opportunity cost was the music stage. The parking lot is not an opportunity cost because it was not part of the city's two choices.