Question

Harry has been very busy at work for the past two weeks. He has been working weekends too. Finally, he is going to get a weekend off. Originally, he planned to paint his apartment that weekend. He also considered going fishing for the weekend. But then his parents called and asked him to come for dinner because it has been a while since they have seen each other. Later on, his friend Theo informed him about a surprise birthday party for another friend. Theo plans to reserve a room at a restaurant for the celebration, with the cost to reserve the room split between Theo, Harry, and three other friends. Now Harry is confused about what he should do over the weekend. He decides that, for him, the most important commitments are going over to his parent's house and attending his friend's birthday party. In the end, Harry decides to see his parents.

Answer 1

What is the opportunity cost in this scenario? Harry has been very busy at work for the past two weeks. he has been working weekends too. finally, he is going to get a weekend off. {{originally, he planned to paint his apartment that weekend.}} he also considered going fishing for the weekend. {{but then his parents called and asked him to come for dinner}} because it has been a while since they have seen each other. {{later on, his friend theo informed him about a surprise birthday party for another friend.}} theo plans to reserve a room at a restaurant for the celebration, with the cost to reserve the room split between theo, harry, and three other friends. now harry is confused about what he should do over the weekend. he decides that, for him, the most important commitments are going over to his parent's house and attending his friend's birthday party. in the end, harry decides to see his parents.

Answer: The opportunity cost in this scenario is the three opportunities which Harry lost by making a decision to visit his parents.

Explanation:

Opportunity cost is the loss of an opportunity because of choosing the alternate option. In the following example, we can figure out that during the weekend Harry planned to paint his house, go for a fishing, and attend his friend’s birthday party. But his parents called him for a family dinner. So Harry choose to visit his parents and have dinner with them instead of partying with his friends, completing his painting task, and going for fishing. In this way, Harry lost three opportunities.