Explain the trade-offs of taking care of a love one and attending college. List the alternatives...

Explain the trade-offs of taking care of a love one and attending college. List the alternatives you had, identify the highest valued alternative and explain your final decision?

Expert Solution

Alternatives:

No1) if the college is attended, few alternatives are gone – (a) watching movie, (b) playing basketball, and (c) taking sleep.

No.2) if there is watching movie, few alternatives are gone – (a) attending college, (b) playing basketball, and (c) taking sleep.

Highest value:

Suppose the following highest values are assigned to each alternative.

Watching movie = $5

Playing basketball = $3

Taking sleep = $2

Attending college = $7

Decision:

The college must be attended, since it has the highest value ($7) out of all alternatives. The next best alternative is watching movie ($5) – this is the opportunity cost of attending college.

Opportunity cost (OC) should be calculated as below:

	Opportunity cost
Attending college	5/7 = 0.71 (lower)
Watching movie	7/5 = 1.4

The lower opportunity cost establishes comparative advantage; in this case attending college. The act should be done which has comparative advantage, as attending college.

Rahul Sunny answered 1 year ago

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