Question

John's friend just gave him a pair of concert tickets to see his favorite rock group perform this weekend. Each ticket sells for $25. John's boss asked him to work overtime the same weekend and at the same time as the concert. John currently makes $10.00 an hour and his overtime pay for the four hours his boss asked him to work is double the hourly rate. If John decides to go to the concert, his opportunity cost is

Answer 1

Answer:

$80 lost for not working

Explanation:

Opportunity cost refers to the sacrificed benefits as a result of preferring on a particular option over another. As people make choices, the forfeit one option in favor of another. Opportunity cost is the missed value of the next best alternative.

For John, he has a choice between working or going to the concert.  He has two tickets worth $50. Working would mean her twice her regular income, which is $20 per hour. If he works for four hours, his total earning will be $80. If John chooses to go to the concert, he will miss the opportunity to earn $80. The opportunity cost will be the missed $80 that he would have received from working.