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Ka-fu Wong University of Hong Kong

Ka-fu Wong University of Hong Kong. In-class exercise #1. The Question.

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Ka-fu Wong University of Hong Kong

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  1. Ka-fu WongUniversity of Hong Kong In-class exercise #1

  2. The Question • You won a free ticket to see aconcert by Eason Chan, a local pop singer. You cannot resell it (say, your photo ID will be checked at entrance). Yo-Yo Ma, the world’s finest cellist, is performing on the same night and is your next-best alternative activity. Ticketsto see Yo-Yo Ma cost $800. On any given day, you would be willing to pay up to $1000 to see Yo-Yo Ma. Assume there are no other costs of seeing either performer. Based on thisinformation, what is the opportunity cost of seeing Eason Chan? (A) $0. (B) $200. (C) $800. (D) $1000.

  3. Special case I • You won two free ticket to see the concertsby Eason Chan, a local pop singer, and Yo-Yo Ma, the world’s finest cellist. You cannot resell it (say, your photo ID will be checked at entrance). They are performing on the same night. You would be willing to pay up to $1000 to see Yo-Yo Ma. Assume there are no other costs of seeing either performer. Based on thisinformation, what is the opportunity cost of seeing Eason Chan? (A) $0. (B) $200. (C) $800. (D) $1000.

  4. Special case II • You won a free ticket to see aconcert by Eason Chan, a local pop singer. You cannot resell it (say, your photo ID will be checked at entrance). Yo-Yo Ma, the world’s finest cellist, is performing on the same night and is your next-best alternative activity. Ticketsto see Yo-Yo Ma cost $1000. On any given day, you would be willing to pay up to $1000 to see Yo-Yo Ma. Assume there are no other costs of seeing either performer. Based on thisinformation, what is the opportunity cost of seeing Eason Chan? (A) $0. (B) $200. (C) $800. (D) $1000.

  5. The Question • You won a free ticket to see aconcert by Eason Chan, a local pop singer. You cannot resell it (say, your photo ID will be checked at entrance). Yo-Yo Ma, the world’s finest cellist, is performing on the same night and is your next-best alternative activity. Ticketsto see Yo-Yo Ma cost $800. On any given day, you would be willing to pay up to $1000 to see Yo-Yo Ma. Assume there are no other costs of seeing either performer. Based on thisinformation, what is the opportunity cost of seeing Eason Chan? (A) $0. (B) $200. (C) $800. (D) $1000.

  6. End

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