Reference no: EM132066109

In some cases, realizing the opportunity cost can alter behavior. Imagine, for example, that you spend $8 on lunch every day at work. You may know perfectly well that bringing a lunch from home would cost only $3 a day, so the opportunity cost of buying lunch at the restaurant is $5 each day (that is, the $8 buying lunch costs minus the $3 your lunch from home would cost). $5 each day does not seem to be that much. However, if you project what that adds up to in a year-250 days a year × $5 per day equals $1,250, the cost, perhaps, of a decent vacation. If the opportunity cost is described as "a nice vacation" instead of "$5 a day," you might make different choices.

(Opportunity Cost) You can either spend spring break working at home for $80 per day for five days or go to Florida for the week. If you stay home, your expenses will total about $100. If you go to Florida, the airfare, hotel, food and miscellaneous expenses will total about $700. What's your opportunity cost of going to Florida?