Economics and Opportunity Cost Essay

1006 Words5 Pages
The Cost of Something Mankiw's Ten Principles of Economics Opportunity cost is the value of the next best alternative in a decision. Imagine that you have $150 to see a concert. You can either see "Hot Stuff" or you can see "Good Times Band." Assume that you value Hot Stuff's concert at $225 and Good Times' concert at $150. Both concerts cost $150 per ticket, but it would take you a couple of hours to drive to Hot Stuff's concert and you have to be in school (the next) morning for an exam. Good Times' concert is right here in town. Explain how you would assess the opportunity cost of seeing Good Times in concert. What is the opportunity cost of going to Good Times' concert? Develop a response that includes examples and evidence to…show more content…
Both tickets for both the bands are $150 per ticket – but one is in the state of Nevada, which is about 4 hours away (not including traffic), while one is less than 10 minutes away from my home. Though both bands cost the same, I value Hot Stuff’s concert at $225. I am debating on which two bands to invest my time in seeing, or even second thinking whether or not I should stay home and rest in preparation for my GRE exam in the morning. Marginal utility is a vital economic concept used to determine how much an item a consumer will buy. By definition, marginal utility is the additional satisfaction a consumer gains from consuming one more unit of a good or service. In my particular case, I am willing to pay a marginal utility of $225 per ticket, drive 4 hours to Las Vegas, and return to Anaheim once the concert is over around 1 AM. But does that make any sense for me to spend almost 12 hours, the night before my exam, attending a concert in another state? Absolutely not! Although the satisfaction of attending a concert I’ve been waiting several years to see will be spectacular, the amount of satisfaction that comes with resting well and earning a high GRE score will be much greater. Giving up my favorite band, Hot Stuff, would be the first off the list. A good nights’ rest is simply the next best alternative to dismiss the concert. The Good Times concert at the Anaheim House of Blues sounds very
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