A consultant who earns $100 per hour takes four hours off work to go to the movies.The out-of-pocket cost for the cab and the movie ticket are $12.The total cost of the movie to the consultant is

Question

Quizplus · Accepted Answer

The total cost includes the out-of-pocket expenses ($12) plus the opportunity cost of not working for four hours ($400, since 4 hours * $100/hour = $400). Therefore, the total cost is $12 + $400 = $412.

A Consultant Who Earns $100 Per Hour Takes Four Hours