Calculating Surplus from a Career Development Choice
A student is deciding how to spend their Saturday. They can attend a coding workshop that they value at $200, but it has a registration fee of $50. Alternatively, they could take on a freelance gig that would earn them $120. Assuming the freelance gig is the next best alternative, what is the economic surplus (rent) the student gains by choosing to attend the workshop?
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Social Science
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Economy
CORE Econ
Economics
Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.2 Technology and incentives - The Economy 2.0 Microeconomics @ CORE Econ
Application in Bloom's Taxonomy
Cognitive Psychology
Psychology
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Evaluating a Consumer's Trade-Off Decision
Alex has a free evening and is deciding between two options. Option A is to go to a movie, which Alex values at $50. The movie ticket costs $15. Option B is to work an extra shift, which would pay $40, but would require $10 for transportation. If Alex chooses to go to the movie, what is the surplus gain from this decision compared to the next best alternative?
Calculating Surplus from a Career Development Choice
Jamie is deciding how to spend their Saturday afternoon. They could go to a street festival, which they value at $90. Getting there and buying food will cost $20. Alternatively, they could take a freelance graphic design gig that pays $75, but they would need to spend $15 on a special software subscription for the project. Jamie chooses to go to the festival. The surplus gain, or economic rent, from choosing the festival over the gig is $15.
Jamie is deciding how to spend their Saturday afternoon. They could go to a street festival, which they value at $90. Getting there and buying food will cost $20. Alternatively, they could take a freelance graphic design gig that pays $75, but they would need to spend $15 on a special software subscription for the project. Jamie chooses to go to the festival. The surplus gain, or economic rent, from choosing the festival over the gig is $15.
Sarah chose to attend a coding workshop instead of working on a freelance design project. The freelance project would have provided a net benefit of $150. Sarah valued the workshop at $250. After her decision, she calculated that the surplus gain from choosing the workshop was $40. What was the cost of the workshop ticket?
An individual is faced with several decisions, each with a chosen action and a next best alternative. Match each scenario with the correct economic rent (the surplus gain) generated by the chosen action.
Constructing a Scenario to Illustrate Economic Rent
An individual is deciding how to spend their evening. They have three options:
- Attend a concert: They value the experience at $100, and the ticket costs $40.
- Work an overtime shift: They would earn $80, with no additional costs.
- Go out for dinner with friends: They value this at $70, and the meal would cost $30.
If this individual chooses to attend the concert, what is the surplus gain (or loss) from this decision compared to the next best alternative?
Analyzing a Decision with Irrelevant Costs