Question

After the concert discussed in Problems, 2-3 is over and you and your friend are traveling home, you discuss how each of you might otherwise have used the four hours devoted to attending the concert. The four hours could have been used to study, watch a sporting event on TV, or get some extra sleep. Your friend decides that if she had not spent four hours attending the concert, she would have chosen to study, and you reply that you otherwise would have watched the televised sporting event. Identify the relevant opportunity costs for you and your friend for allocating your four hours to attending the concert. Explain briefly.

Short answer

The opportunity cost for you is televised sporting event and the opportunity cost for your friend is study.

Step-by-step solution

Step 1. Opportunity Cost

Opportunity cost is the cost foregone for the alternative choices to satisfy wants.

Step 2. The opportunity cost for each person.

The opportunity cost for you is a televised sporting event and the opportunity cost for your friend is studying because these are the opportunities that they will miss for attending the concert ticket for four hours.