Learn Before
Decision-Making for a Taxi Driver (Australian Open vs. Work)
This example presents a decision-making scenario for a taxi driver in Melbourne. The driver earns \A$50 for a day of work. They have the option to buy a ticket to the Australian Open for \A$40. Being a tennis enthusiast, the driver personally values the experience of attending the event at \A$100. This scenario provides a practical application for calculating economic concepts like opportunity cost, economic cost, and economic rent to determine the most beneficial course of action.
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Social Science
Empirical Science
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Economics
Economy
Introduction to Microeconomics Course
CORE Econ
Ch.2 Technology and incentives - The Economy 2.0 Microeconomics @ CORE Econ
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Comparing Alternatives in Decision-Making (Concert vs. Babysitting)
Decision-Making for a Taxi Driver (Australian Open vs. Work)
Choosing Between a Paid Theatre Concert and a Free Park Concert
Scarcity
Reservation Option
You have a free ticket to a concert tonight which you value at $50. You could, instead, work a shift at your job and earn $70, or you could babysit for a neighbor and earn $40. Assuming these are your only three options and you can only choose one, what is the opportunity cost of attending the concert?
Analyzing a Summer Decision
Evaluate the following statement: A person has three mutually exclusive options for their evening: 1) Go to a concert they value at $50, 2) Work a shift and earn $80, or 3) Read a book they value at $20. If they decide to work the shift, their opportunity cost is $70, representing the sum of the values of the concert ($50) and the book ($20) that they gave up. True or False?
For each economic decision described below, match it with the correct statement of its opportunity cost.
Analyzing the True Cost of a Decision
Explaining Opportunity Cost
A student has three mutually exclusive options for their Saturday afternoon: they can work a 4-hour shift at the campus library for $15 per hour, go to a movie with friends which they value at $40, or take a paid online survey that will earn them a total of $50. If the student chooses to work at the library, the opportunity cost of this decision is $____.
An individual has decided to spend their Saturday afternoon working a part-time job. To correctly identify the opportunity cost of this decision, they must follow a logical process. Arrange the following steps into the correct sequence.
The Baker's Dilemma
Alex is deciding how to spend their Friday night. They can either go to a movie, for which a ticket costs $12 and which they value at $30, or they can work a tutoring session and earn $40. These are Alex's only two options. What is the opportunity cost of choosing to go to the movie?
Economic Profit vs. Accounting Profit
Decision making under scarcity
Shareholder Investment Principle
Economic Cost
Wage as the Opportunity Cost of Free Time
Karim's Work-Leisure Decision in Madrid
Economic Rent
Learn After
A person can spend their day working, where they would earn $50. Alternatively, they could attend a special event. The ticket for the event costs $40, and the personal value this individual places on the experience of attending is $100. Considering all the relevant costs and benefits, which of the following represents the most economically rational decision and the correct reasoning for it?
Evaluating a Professional Decision
A taxi driver can earn $50 for a day of work. They are considering attending a special event instead. The ticket for the event costs $40, and the driver personally values the experience of attending at $100. Match each economic term to its correct monetary value based on this scenario.
Decision Threshold Analysis
Evaluating a Leisure-Work Trade-off
A person can earn $50 for a day of work. They are considering attending a special event instead, for which a ticket costs $40. The person values the experience of attending the event at $100. To make a rational economic decision, one must calculate the full cost of attending the event, which includes both the direct payment and the value of the foregone alternative. In this scenario, the total economic cost of attending the event is $____.
A person is deciding between working for a day to earn $50 or attending a special event. The ticket for the event costs $40, and they value the experience at $100. Arrange the following steps into the correct logical sequence for making a rational economic decision about attending the event.
A taxi driver can earn A$50 for a day of work. They are considering attending a special event instead, which they personally value at A$100. Based on this information, what is the absolute maximum price the driver should be willing to pay for a ticket to the event before it is no longer the economically rational choice?
Analyzing a Change in Opportunity Cost