Nancy asks Beth to be her maid of honour at her wedding. Bethaccepts. Wich of th

Question

Nancy asks Beth to be her maid of honour at her wedding. Bethaccepts. Wich of the following are part of her opportunitycost of being Nancy's maid of honour? Explain why they are orare not.
a) The $200 she spent on a new outfit for the occasion.
b) The $50 she spent on a party for Nancy's friends.
c) The money she spent on a haircut a week before the wedding.
d)The weekend visit she missed for her grandmother's 75thbirthday-the same weekend as the wedding.
e) The $10 she spent on lunch on the way to the wedding.

Explanation / Answer

Actually, DavidP's answer here is incorrect. AnOPPORTUNITY COST is what you give up to get something. So itINCLUDES monetary costs, but also includes the foregone gains fromdoing your next-best use of resources. So, the opportunitycost of attending school includes your tuition and textbooks, butalso includes the money you're losing if you had been workinginstead (assuming you would work instead) or the value you place onyour leisure time (if you'd be unemployed instead). . . The key to this question, therefore, is to ask what she wouldhave done if she had NOT gone to the wedding. Any benefitsshe would have realized instead (such as visiting Grandma) are partof the opportunity cost. But any costs she would haverealized anyway are NOT part of the opportunity cost.

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