Carl Is Considering Attending a Concert with a Ticket Price

question 69

Multiple Choice

Carl is considering attending a concert with a ticket price of $35.He estimates that the cost of driving to the concert and parking there will total an additional $20.In order to attend the concert,Carl will have to take time off from his part-time job and forgo studying for an exam scheduled for the next morning.He estimates that he will lose 3 hours at work,at a wage of $6 per hour,plus 2 hours of study time.Carl's opportunity cost of attending the concert equals

• A) $73 plus the value of the higher exam grade he could earn by studying longer
• B) $73
• C) $35 plus the value of the higher exam grade he could earn by studying longer
• D) $35
• E) $55 plus the value of the higher exam grade he could earn by studying longer

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Definitions:

ATC Curves

Short for Average Total Cost curves, these represent the average total cost of production at different levels of output, depicting how costs per unit change as the scale of production increases or decreases.

Constant-Cost Industry

An industry where the input costs remain the same regardless of the industry's output level.

Long-Run Supply Curve

A graphical representation showing how the quantity of goods supplied by firms changes over time as all factors of production can be varied.

Decreasing-Cost Industry

An industry in which the costs of production decrease as the industry expands, often due to efficiencies gained from economies of scale.