Comparative Advantage Q (1 Viewer)

trungduong12

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My tutor said $100
(Since its the next best alternative)


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nerdasdasd

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It depends on which option they pick
 

trungduong12

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Tutor said $120, she gives up $100 and $20. However, I am still edgy about this.
$100 is right i think
Since its the next- best value alternative that she "could" pick



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photastic

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Where'd the $20 come from?
Tutor said include the taxi of $20 to the concert but if she's going to the concert, then we should disregard the taxi, otherwise she is only losing the $100. However the question did not specify if she could do both jobs at the same time so if she could work both as a babysitter and working at the cafe on the same night which is possible if you are the owner, then she's giving up $170 because working for both is the better alternative than working just for the cafe :p
 
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nedzelic

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It's a $100 for sure.

Remember the OC is the value of the next best alternative forgone. She goes to the concert, so that's out of the picture. So it's left to the two other options. On a per $1 basis, we're told that she is indifferent between babysitting and working in a cafe. Naturally then, she would be choosing working in a cafe for $100. So working in a cafe for $100 is the next best alternative, and hence the opportunity cost of attending the concert.
 

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