Question

people with a higher opportunity cost of time are more willing, ceteris paribus, to pay a higher money price for goods that save time than people with a lower opportunity cost of time. First, provide an example of a product where an important part of the true cost of the product is the time price. Can you think of something that seems to be a bargain at first because of its low money price, but that isn't as much of a bargain when you consider both the money price and the time price of the good? Can you think of an example of a new good or service being offered that reduces the time price of a good while charging a higher money price? Are there any opportunities for mutual gain or an increase in societal utility if someone with low opportunity cost of time provides a service (e.g., waiting in line) for a person with a higher opportunity cost of time?

Answer 1

OPPORTUNITY COST OF TIME

The opportunity cost of time is a sacrifice to make or give up something for those not in the primary list instead of earning any needful things or services.We all are thinking about how to save money by spending time.While we dealing with oppertunity cost we have a few questions in our mind which are really important.How much i spend for this? How much do i value this? Is iam giving up in future to have this now?.For example one one student spends 2 hrs for a movie the oppertunity cost is time spent for studying and the money use for some other purpose.If one person spends their time for aperson who has higher opportunity cost there is no mutal gains.While exchange lead to consumption oppertunities beyond ppc.But this is effective while considering the scarcity and choice of a relation.The concept is an important one because we put our energy , money, time to make someting happen instead of using those to achieve some important things in our life and here it gives a chance to remind us something to grow, improve better than yesterday