Question

Select the correct text in the passage. What is the opportunity cost in this scenario? Mikael has saved $4,000 for his trip to Brazil. He has calculated that his total transportation expenses will be $1,000. The hotel will cost him another $1,500. He will spend about $500 on food. He plans on spending the remaining $1,000 for sightseeing and buying souvenirs. While booking his plane ticket, he realizes that the price has gone up. His total transportation expenses will go up by $200. He realizes that he cannot cancel his hotel reservation. He also doesn’t want to go cheap on food. Finally, he decides to give up visiting the popular Ouro Preto during his stay in Brazil.

Answer 1

Answer:

opportunity cost for him in this trip for mikael = $1500

Step-by-step explanation:

Mikael has saved $4,000 for his trip to Brazil

transportation expenses = $1,000

hotel expenses = $1,500

food expenses  = $500

sightseeing and buying souvenirs expenses = $1,000

additional transportation expenses = $ 200

Total Expenses = $ 4200

In case of cancellation of trip

Total loss = $ 1500

This is the opportunity cost for him in this trip

Hence , in order to save the additional expenditure of $200 , Mikael will have to bear a loss of $ 1500.