For each of the following situations identify the full cost

For each of the following situations, identify the full cost (opportunity cost) involved:

1. A customer waits in a checkout line.

2. Tom decides to attend a Packer game.

3. A government decides to go to war.

4. Bill stacks dirty dishes in the dishwasher.

5. Is there any activity that does not have an opportunity cost?

Solution

The full cost (opportunity cost) involved:

1. A customer waits in a checkout line.

\"points lost due to not studying\"

2. Tom decides to attend a Packer game.

\"points lost due to not studying\"

3. A government decides to go to war.

when military action works as planned, it is hard to justify in terms of opportunity cost. The total figures are staggering. The Afghan and Iraq wars between them are estimated to have cost the US between $4 trillion and $6 trillion dollars in wartime expenditures and future medical bills for veterans (Bilmes). That’s ten times the total amount of aid received by the whole of Africa since 1945, an amount regularly cited to show the futility of foreign aid.

4. Bill stacks dirty dishes in the dishwasher.

5. Is there any activity that does not have an opportunity cost?

No