You lose $20 from your wallet and decide to miss an hour from work in order to search for it.To an economist, this means that:

Question

Quizplus · Accepted Answer

By deciding to miss an hour from work and search for the lost $20, the person is indicating that the expected value of searching for the lost $20 for an hour (in terms of the probability of finding the money) is greater than the opportunity cost of missing one hour of work at their current hourly wage. This suggests that the person places a higher value on their own time than on the $20 they lost.

You Lose $20 from Your Wallet and Decide to Miss