Question

Simon is given a free ticket to see Coldplay Saturday night. He already has a ticket to see Sting in concert that night. The Sting ticket cost Simon $50 though he would have paid as much as $80 to go to the show. Simon knows that he can easily sell the Sting ticket on Craigslist for $60. What is his opportunity cost of seeing Coldplay? Four years after graduating from college you must decide if you want to go on as an accountant (your college major) or if you want to make a career change and become a singer. Should the cost of your education matter for your decision after you have graduated from the college?

Answer 1

1.Opportunity cost of seeing Coldplay is 0.

If he goes to see coldplay,he sells the sting ticket for $60 which would be his gain from seeing Coldplay.

The opportunity cost for sting would be 60 because if he goes to sting,he won't get that $60.

2.Yes,if the cost of college education was very high,the person would pursue a career in accountancy to earn the return from education.

However,if the cost was marginal,he may want to pursue a career in singing because the degree didn't cost him much.