Sue is on her way to attend a rock concert. She already has her ticket. Just bef

Question

Sue is on her way to attend a rock concert. She already has her ticket. Just before the concert she gets invited to go to two parties on the same night as the concert. The ticket costs $50 and can be re-sold for $40. She can go to the concert or one of the parties. Evaluate the following statements.

Statement I: The opportunity cost of going to the concert is the value of the better of the two parties and $40.

Statement II: The opportunity cost of going to the concert would be zero if she got the ticket as a gift and hated going to parties.

Statement III: The opportunity cost of going to the concert is the value of both parties and $50.

Which statement or statements are true?

A. II and III only

B. III only

C. I only

D. II only

E. I and II only

Explanation / Answer

Answer is C. I Only.

Explanation:

The Opportunity cost of going to the concert is the opportunities which the person missed i.e. value of any of the two parties which like the most and also missed out to get $ 40 from resale of tickets.

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