Alex chose to attend a concert with a $40 ticket price instead of working a shift that would have provided a net benefit of $50. Assuming Alex made a rational economic decision, what is the minimum value Alex must have placed on the enjoyment of the concert?
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Ch.2 Technology and incentives - The Economy 2.0 Microeconomics @ CORE Econ
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Alex chose to attend a concert with a $40 ticket price instead of working a shift that would have provided a net benefit of $50. Assuming Alex made a rational economic decision, what is the minimum value Alex must have placed on the enjoyment of the concert?
A student is deciding how to spend their Friday night. They could go to a movie, which they value at $40; the ticket costs $15. Their only other alternative is to work a tutoring session, which would earn them $30. The student decides to go to the movie because the enjoyment they get ($40) is greater than the money they would have earned from tutoring ($30). According to the principle of comparing an action's net benefit to its opportunity cost, the student's reasoning for their decision is correct.