You have two options for how to spend the afternoon. You can either go see a movie with your roommate or work as a tutor for the Math Department. From experience, you know that going to see a movie gives you $20 worth of enjoyment, and with your student discount, a movie ticket only costs $12. If you spend the afternoon working as a math tutor, you will get paid $45. On a typical day, you wouldn't be willing to spend the afternoon working as a math tutor for less than $35. Should you go see a movie or work as a math tutor?
A)You should work as a math tutor.
B)You should go to the movies.
C)You should do neither.
D)Both options are equally good.

Question

Quizplus · Accepted Answer

To determine your best choice, calculate the value of each option as if it were your only choice. In this case, your economic surplus from going to the movies would be $8 (= $20 - $12)and your economic surplus from working as a math tutor would be $10 (= $45 - $35). Thus, your economic surplus would be higher if you worked as a math tutor.

You Have Two Options for How to Spend the Afternoon