Scenario 13-3
Tony is a wheat farmer,but he also spends part of his day teaching guitar lessons.Due to the popularity of his local country western band,Farmer Tony has more students requesting lessons than he has time for if he is to also maintain his farming business.Farmer Tony charges $25 an hour for his guitar lessons.One spring day,he spends 10 hours in his fields planting $130 worth of seeds on his farm.He expects that the seeds he planted will yield $300 worth of wheat.
-Refer to Scenario 13-3.What is the total opportunity cost of the day that Farmer Tony incurred for his spring day in the field planting wheat?

Question

Quizplus · Accepted Answer

The opportunity cost of Farmer Tony's spring day in the field planting wheat is the total amount of money he could have earned from teaching guitar lessons. He charges $25 an hour for his guitar lessons and spent 10 hours planting seeds, so he could have earned $250 in that time. In addition to that, he expects the seeds he planted will yield $300 worth of wheat. Therefore, the total opportunity cost of Farmer Tony's spring day in the field planting wheat is $250 (opportunity cost of teaching guitar lessons) + $130 (cost of seeds) = $380.

Scenario 13-3 Tony Is a Wheat Farmer,but He Also Spends Part of Part