Assume that you are considering a 7-night vacation to Fort Walton Beach, Florida, in March. You estimate the total cost of the trip to Fort Walton Beach at $1,250, including discounted airfare. However, a resort at Myrtle Beach, South Carolina, is offering 3 free nights with a 7-night stay. The advertised value of this special 3-night free offer is $397. In addition, you must use a $200 flight coupon that you received from an airline last December to compensate you for a 6-hour flight delay. After applying the $200 flight coupon and the $397 for the 3 free nights, the total out-of-pocket cost for the trip to Myrtle Beach is $1,100. Based on the total explicit and implicit costs, should you take the trip to Fort Walton Beach or to Myrtle Beach? Explain your answer and support it with total cost estimates (explicit plus implicit) for each trip option.

Question

Assume that you are considering a 7-night vacation to Fort Walton Beach, Florida, in March. You estimate the total cost of the trip to Fort Walton Beach at $1,250, including discounted airfare. However, a resort at Myrtle Beach, South Carolina, is offering 3 free nights with a 7-night stay. The advertised value of this special 3-night free offer is $397. In addition, you must use a $200 flight coupon that you received from an airline last December to compensate you for a 6-hour flight delay. After applying the $200 flight coupon and the $397 for the 3 free nights, the total out-of-pocket cost for the trip to Myrtle Beach is $1,100. Based on the total explicit and implicit costs, should you take the trip to Fort Walton Beach or to Myrtle Beach? Explain your answer and support it with total cost estimates (explicit plus implicit) for each trip option.

Answer 1

Walden is NOT the name of your school subject.

Answer 2

To determine whether to take the trip to Fort Walton Beach or Myrtle Beach, we need to compare the total costs of each option, including both explicit and implicit costs.

For the trip to Fort Walton Beach, the estimated total cost is $1,250, including discounted airfare. Here, the explicit costs are the actual out-of-pocket expenses you will incur, which amount to $1,250.

For the trip to Myrtle Beach, the advertised value of the special 3-night free offer is $397, which reduces the total cost. Additionally, you have a $200 flight coupon that can be applied. After subtracting these amounts, the total out-of-pocket cost for the trip to Myrtle Beach is $1,100.

Now, let's consider the implicit costs. Implicit costs refer to the opportunity costs, or the benefits you would have received by choosing the other option instead. In this case, the implicit cost of choosing Myrtle Beach over Fort Walton Beach would be the difference in the value you assign to visiting each location.

Since the question doesn't provide any information about the implicit costs or personal preferences, we'll focus solely on the explicit costs. Based on the given information, the total out-of-pocket cost for the trip to Myrtle Beach is $1,100, which is less expensive than the estimated total cost of $1,250 for the trip to Fort Walton Beach.

Therefore, based on explicit costs alone, it seems more cost-effective to take the trip to Myrtle Beach. However, it's important to consider any implicit factors or personal preferences that may influence your decision.