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Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050

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BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050
Textbook Problem

Your opportunity cost of going to a movie is

a. the price of the ticket.

b. the price of the ticket plus the cost of any soda and popcorn you buy at the theater.

c. the total cash expenditure needed to go to the movie plus the value of your time.

d. zero, as long as you enjoy the movie and consider it a worthwhile use of time and money.

To determine
The opportunity cost of going to a movie.

Explanation

Option (c):

The opportunity cost of going to a movie is the total cash expenditure needed to go to the movie, plus the value of spending time for watching the movie. So the option ‘c’ is correct.

Option (a):

The opportunity cost of going to a movie means the total cost that is given up to go for a movie. Here the price of ticket is not only the factor that we have given up. To calculate the opportunity cost, we should consider the entire given up expenditure. Thus, the option ‘a’ is incorrect...

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