Question

Pedro lives in the dorms and works as a barista at Starbucks. He earns $15 an hour and can work as many hours as he wants. He is considering the possibility of selling coffee to this dorm mates. His mother gave him an espresso machine when he left home for college. He can brew 30 cups of coffee an hour. He would buy the coffee grounds from a local retailer. The cost of the grounds for a cup of coffee would average $0.10 per cup. What is the opportunity cost for Pedro to sell a cup of coffee to one of this dorm mates?

Answer 1

ANSWER :: 0.1

=> Explanation ::

Opportunity Cost Is Loss of Other Alternative When One Alternative is Chosen. so Here Pedro Work As A barista At Starbucks And Earn $15 An Hour And Work Many Hour As He want So Pedro Chose To Work As Barista But He Left to Work On Its Mother Espresso Machine Which Has Opportunity Cost Of

Opportunity Cost = 30 Cups Per Hour * 0.10 Ground Cost = $3 Per Hour For Call Cups Of Coffee

-> Opportunity Cost To Sell Coffee to One of Its Dorm Mates Is

= $3/30 Cups

= $0.10 (Opportunity Cost Per Hour)