Question

A US citizen is considering having plastic surgery in Costa Rica. The next best alternative for her is to have that surgery done in a local doctor's office, where is it priced significantly higher The full opportunity cost of having surgery in Costa Rica versus having it done locally would include all of the following except

a) roundtrip airfare

b)direct price of the procedure

c)hotel costs incurred during the mandatory recovery time while in Costa Rica

d)lost income due to down time

e)acceptance of certain risks, including not having access to follow up care from the same physician upon return

Answer 1

• Option d is the answer.
• Lost income due to downtime is an exception for the oppurtunity cost.
• Oppurtunity cost is the value of something that must be sacrificed inorder to achieve an alternative.
• Here, the decision of performing the plastic surgery is already made. Only the location is to be determined. In such scenarios, the full oppurtunity cost of having the surgery in Costa Rica versus having it done locally does not include lost income due to downtime.
• When the case was to determine whether or not to perform the surgery, then the lost income due to downtime could have been included in the opportunity cost.