Question

1. If a concert ticket is $50, you has the ticket and can resell it for $75. The opportunity cost is actually for you to attend the concert now is?

2. If the supply of a resource increases, what happens to the equilibrium of the price and quantity?

Answer 1

Answer : 1) Concert ticket price is $50. If I do not attend the concert then I can resell my ticket at $75. So, if do not attend the concert then my profit = 75 - 50 = $25.

Now, if I attend the concert then I am losing $25. So, my opportunity cost of attending the concert is $25.

2) When supply increase then supply curve shift to rightward. As a result, at new equilibrium the price level fall and quantity level increase. As here the supply of resources increases hence the price level will fall and quantity level will increase.