Mary earns $100/day at a flower shop. She will take 2 days off without pay to attend an out of town wedding. Transportation will cost $180 round trip. Hotel $99/day for 2 nights. What is the opprotunity cost?
If she had worked those two days, she would make +$200
Instead, she spends $180 + $198 = $378
The total opportunity cost is 378 + 200 = 578. This is how much money she'll lose by going on the trip instead of working
To calculate the opportunity cost for Mary, we need to consider the income she would have earned if she had not taken the days off for the wedding.
First, let's calculate her total income for the days she will work at the flower shop. Mary earns $100 per day, and she will work for (7 days - 2 days off) = 5 days. So her income from working would be 5 * $100 = $500.
Next, we need to deduct the expenses associated with the wedding. The transportation cost is given as $180, and the hotel cost for 2 nights is $99/day * 2 days = $198. The total expenses for the wedding are $180 + $198 = $378.
Now, to calculate the opportunity cost, we subtract the expenses from the income:
Opportunity Cost = Income - Expenses = $500 - $378 = $122.
Therefore, the opportunity cost for Mary to attend the out of town wedding is $122.