But, according to the author, the value of “Hot Stuff” is more than that of the Good Times Band’s concert. Attending the Good Times Band’s concert would involve a cost of $150 for the ticket. In this case, the opportunity cost of attending the concert is equal to the fuel cost in driving minus the extra value of “Hot Stuff” concert. Everyone has to witness the usage of the concept of opportunity cost in their everyday lives. People from all walks of life, ranging from businessmen to teenagers, often need to take decisive calls. Therefore, we can define opportunity cost as anything that a person sacrifices in order to obtain something of his choice. The ticket prices are same for both concerts. But, price is not the sole decisive factor in this case. Attending “Hot Stuff” involves a travelling cost and time. In this situation, the opportunity cost of attending the Good Times Band concert is the $75 that will be gained from not having to travel to “Hot Stuff” and the scope of studying for some more time before the examination. In this case, the author loves both the bands equally. Yet, in order to attend one of them, he will have to sacrifice the other band’s live performance. Thus, the opportunity appears to be the same. However, the author must take into account the time and cost factors that are involved in the decision. The Good Times Band’s concert is in town and so, there are no extra costs. ...
Opting to watch “Hot Stuff” is more risky than opting to watch the Good Times Band, in
The Difference between Macro and Microeconomics - Essay Example
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The Difference between Macro and Microeconomics
terms of money as well as time, which is essential hours before the examination. Therefore, in this case, the author should opt for watching Good Times Band rather than “Hot Stuff”. If only ticket prices are compared, it can be assumed that neither of the concerts is a better choice in particular. But, in decision making process, the parameters of value are more important than those of money (Culverhouse College of Commerce, n.d. pp. 2-6). One can assume that going to watch “Hot Stuff” is a better option because of higher value. However, this will not be a valid conclusion as this assumption ignores many factors. Today, time and money are the most valued commodities and the author has no option but to return from the concert since he has to take the examination the next morning. It implies that the author must foresake some extra sleep if he wishes to watch “Hot Stuff”. Again, the author has only $150 and so he cannot afford the $225 required to watch “Hot Stuff”. So, watching the Good Times Band emerges as a better option. Although “Hot Stuff” is a better band, the value of the opportunity cost of going to watch it is much higher for the author than the value of the opportunity cost of watching Good Times Band. Unless the author finds a friend to drive and have some extra fun to nullify the extra value incurred in watching “Hot Stuff”, it is better for the author to choose watching Good Times Band. The author is in no mood to waste money or time. So, the optimal decision for the author will drive him to watch the Good Times Band. The author can also weigh the pros and cons of the shows of
Summary
The Difference between Macro and Microeconomics Opportunity cost is the best alternative available in the decision making process. In this case, the decision to act upon is complicated by the distance between the concerts of “Hot Stuff” and Good Times Band…
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