Opportunity cost is the value of the next best alternative in a decision. Imagine that you have $175 to see a concert. You can either see “Y4” or you can see “Bread N’ Butter”. Assume that you value Y4’s concert at $250 and Bread N’ Butter’s concert at $175. Both concerts cost $175 per ticket, but it would take you a couple of hours to drive to Y4’s concert and you have to be in school the next morning for an exam. Bread N’ Butter’s concert is right here in town. You can choose to go to either concert or none. Explain how you would assess the opportunity cost each for seeing Y4, Bread N’ Butter, or staying home. Use the 2021 IRS mileage allowance of 56 cents per mile for cost of using a private vehicle. Calculate the opportunity cost for each option. Be sure to include all appropriate explicit and implicit costs. Your specific calculations should be included in your paper.

Task:

Develop a multi-paragraph response with an introduction, main section, and conclusion, including examples and evidence to support your ideas.
Organize your response in a clear and logical manner using proper economic reasoning. Use well-structured sentences, audience-appropriate language, and correct conventions of standard American English.
The response must be in your own words. Do not use quotes or references.
For a high score, you must properly use economic concepts and terms.
Identify the basic principles of economics and explain how an economist thinks about cost.
Apply the concepts of opportunity cost and marginal analysis to make decisions.