You paid $35 for a ticket (which is non-refundable)to see SPAM, a local rock band, in concert on Saturday. Assume that $35 is the most you would have been willing to pay for a ticket. Your boss called, and she is looking for someone to cover a shift on Saturday at the same time as the concert. You would have to work 4 hours and she would pay you $11/hr. The psychic cost to you of working is $2/hr. Your economic surplus from going to work instead of seeing SPAM on Saturday is:

Question

Quizplus · Accepted Answer

The benefit of working is 4 × ($11 - $2)or $36. The cost of working is the value you place on going to the concert or $35 (since this is the most you would have been willing to pay for a ticket). Note that we do not factor in the cost of the ticket since it's a sunk cost. Subtracting the cost of working from the benefit of working, we see that the economic surplus of working is $1.

You Paid $35 for a Ticket (Which Is Non-Refundable)to See