Your opportunity cost is the cost of the next best alternative you are forgoing to go skiing. In this case that is work and studying.
The trip costs $350 + $60 for skiis + $40 for food. The trip will cost a total of $450.
Your opportunity cost is $450 plus what you lose from not staying home. So your opportunity cost is $550 + (not given $ values in question) value that 8 hours of studying has to you + cost of the meals you miss.
Hope this helps
This is due Monday. I am not sure I am doing it correctly. Can someone help me out?
Question:
Assume that Jim is a rational customer who consumes only two goods, apples(A) and nuts(N). Assume also, that his marginal rate of substitution (MRS) of nuts for apples is given by the following formula:
MRS=MU(a)/MU(n)=N/A
That is, Jim's MRS is simply equal to the ratio of the number of apples consumed to the number of nuts consumed. Jim's income is $200,the price of nuts is $10/lb, and the price of apples is $5/lb.
Calculate the quantities of apples and nuts Jim will consume.
I appreciate the help!
Im a bit confused, could you check to see if you have the problem copied correctly.
You have MRS=MU(a)/MU(n) = N/A
It would make more sense if the equation was: MRS=MU(a)/MU(n) = A/N
In which case, utility is maximized when MRS = slope of the budget constraint which is 2A/N or simply 2.
He consumes 20 apples and 10 nuts.
never mind my first statement; your original formula was (probably) copied correctly.
But the final answer still holds true: Utility is maximized whe the MRS=slope of the busget constraint, which happens at 20A and 10N
microeconomics is cool
The problem is copied correctly. thanks for your help!
I have 30 short question to be answered plus 30 multiple choice question to be completed can someone help! I will pay you.....
You plan to go skiing next weekend. If you do, you’ll have to miss your usual weekend job that pays $100. You won’t be able to study for 8 hours and you won’t be able to use your prepaid college meal plan. The cost of your travel and accommodations will be $350, the cost of renting skis is $60, and your food will cost $40. What is the opportunity cost of the weekend ski trip?
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1 answer