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Opportunity cost in Economics

You are given a ticket to a Bob Dylan concert. The face value of the ticket is $50. You value attending the Bob Dylan concert at $40. You can sell the ticket to a friend for $10 and attend a U2 concert by getting a ticket priced at $60. What is

the opportunity cost of attending the U2 concert?

1 Answer

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  • 9 years ago
    Favorite Answer

    First you give up the ticket of Dylan, it can be sold to your fd for money, so you earn $10 and give up a valuable choice which give you a value at $40.

    so$30 would be your cost of attending U2 concert.

    BTW, you have to pay for the ticket fee of U2 concert, it costs $60 that means you sacrific $60 for the ticket($60 would bring you a value equal to $60 in other way at the margin)

    It means when you attending the U2 concert, your cost would be$90(monetary cost and substitutional cost)

    Your value gained from the U2 concert somehow would be equal to $90 at the margin, if considered other choices were counted on.

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