Scarcity and Opportunity Cost

Economics begins with scarcity

Every choice has an opportunity cost

Explicit costs, implicit costs and surplus

The lens this course will use

You have one free evening. A tutoring shift would pay 54 dollars, a concert is worth 55 dollars to you after paying for the ticket, and a quiet evening at home is worth 25 dollars. You choose the concert. What is the opportunity cost of that choice?

On a Saturday afternoon you could referee youth soccer for a net gain of 38 dollars, work out at the gym for a benefit you value at 20 dollars, or rest at home for a value of 12 dollars. If you choose rationally, which option do you take and what surplus does it generate over your best alternative?

A flower stall you could staff on Sunday is worth 47 dollars to you in net earnings, the best alternative use of the day is worth 39 dollars, and every other option is worth less. Compute the economic surplus of staffing the stall in dollars and write the number.

Your summer offers three options. A paid internship nets you 3,200 dollars, a cafe job nets 2,800 dollars, and an idle summer is worth 900 dollars to you in rest. You take the internship. What is its opportunity cost?

You run a market stall with revenue of 900 dollars, supplies costing 300 dollars, and you gave up a warehouse shift that would have paid 480 dollars. An accountant reports your profit. What does an economist say?

A day at the art fair is worth 120 dollars to you, the entry ticket costs 25 dollars, and you give up a dog-walking shift paying 66 dollars. Compute your economic surplus from attending, and write the number.