1.You plan a major adventure trip for the summer. You won’t be able to take your usual summer job that pays $6,000, and you won’t be able to live at home for free. The cost of your travel on the trip will be $3,000, film and videotape will cost you $200, and your food will cost $1,400. What is the opportunity cost of taking this trip?
2.The university has built a new parking garage. There is always an available parking spot, but it costs $1 per day. Before the new garage was built, it usually took 15 minutes of cruising to find a parking space. Compare the opportunity cost of parking in the new garage with that in the old parking lot. Which is less costly and by how much?
opportunity cost of taking this trip is tavel accomandations
Please I need anwer to the above question
1. The opportunity cost of taking this trip can be calculated by adding up the expenses that would usually be covered by your summer job and living at home for free, but will now need to be paid out of pocket.
Opportunity cost = Cost of travel + Lost income + Housing expenses
Opportunity cost = $3,000 + $6,000 + $0
Opportunity cost = $9,000
Therefore, the opportunity cost of taking this trip is $9,000.
2. To compare the opportunity cost of parking in the new garage versus the old parking lot, we need to consider the time and money involved.
In the old parking lot:
Opportunity cost = Time spent cruising for parking x Value of time
Opportunity cost = 15 minutes x Value of time
In the new garage:
Opportunity cost = Cost of parking in the garage
To determine which option is less costly, we need to compare the value of time spent cruising for parking to the cost of parking in the garage.
Let's assume the value of time is $10 per hour.
In the old parking lot:
Opportunity cost = 15 minutes x $10/60 (to convert minutes to hours)
Opportunity cost = $2.50
In the new garage:
Opportunity cost = $1 (cost of parking in the garage)
Therefore, the opportunity cost of parking in the new garage is less costly by $1.50 ($2.50 - $1).
1. The opportunity cost of taking this trip refers to the value of the next best alternative that you are giving up in order to take the trip.
In this case, the next best alternative would be your usual summer job that pays $6,000. By going on this adventure trip, you won't be able to earn that $6,000. Therefore, the opportunity cost of taking this trip is $6,000.
To calculate this, you subtract the cost of the trip from what you would have earned from your summer job:
Opportunity cost = $6,000 - ($3,000 + $200 + $1,400) = $6,000 - $4,600 = $1,400
So, the opportunity cost of taking this trip is $1,400.
2. To compare the opportunity cost of parking in the new garage with that in the old parking lot, we need to consider the time and money spent in each scenario.
In the old parking lot, it took 15 minutes of cruising to find a parking space. Assuming a wage rate of $10 per hour, this means the opportunity cost of finding a parking space in the old parking lot is:
Opportunity cost in old parking lot = (15 minutes/60 minutes) * ($10/hour) = $2.50
In the new parking garage, there is always an available parking spot, but it costs $1 per day. Assuming you park there for one day, the opportunity cost in the new parking garage is the monetary cost, which is $1.
Comparing the two, we see that the opportunity cost is less in the new parking garage. The old parking lot had an opportunity cost of $2.50, while the new parking garage has an opportunity cost of $1. Therefore, the new parking garage is less costly by $2.50 - $1 = $1.50.