Simon is given a free ticket to see Coldplay Saturday night.He already has a ticket to see Sting in concert that night.The Sting ticket cost Simon $50 though he would have paid as much as $80 to go to the show.Simon knows that he can easily sell the Sting ticket on Craigslist for $60.What is his opportunity cost of seeing Coldplay?

Question

Quizplus · Accepted Answer

The Answer is If Simon did not go to Coldplay,he would see Sting,since he values seeing Sting for more than the resale value of the ticket.If he goes to Coldplay he can sell the Sting ticket,making an economic loss of $20 (80 - 60).Thus,the opportunity cost of seeing Coldplay is $20.Note: the $50 is not relevant in the calculations because the resale value is $60,not $50.

Simon Is Given a Free Ticket to See Coldplay Saturday