Question

You recently got a job as an usher at the nearby movie theater. Last night, you had the opportunity to work but decided to take your very first vacation day. Suppose you could have earned $11 per hour for three hours of work. Instead, you went to a movie yourself, where you spent $13 on a ticket and popcorn.

Your opportunity cost to see the movie was $

Answer 1

Opportunity cost is the cost incurred to choosing an alternative option. Sunk cost is the cost which cannot be

recovered.

Suppose that there is a person who got the opportunity to work but decided to go for vacations. Here, he could have earned \(\$ 11\) per hour for 3 hours of work. Instead, he went for movie which costs him \(\$ 13\).

Find the opportunity cost to see the movie.

\(\begin{aligned} \text { opportunity cost } &=\text { foregone earning }+\text { cost at movie } \\ &=(\$ 11 \times 3)+\$ 13 \\ &=\$ 33+\$ 13 \\ &=\$ 46 \end{aligned}\)

Thus, opportunity cost to see the movie is \(\$ 46\)