Question

A new startup airline is offering free round-trip tickets to anywhere to the first 600 people who enter the office on the airline's first day of business. You arrive 24 hours before they are scheduled to open to be sure to get the free tickets, and you buy food from vendors while waiting in line. The cost of the tickets to you is:
A. zero.
B. just the cost of food while you wait in line.
C. the cost of food while you wait in line plus the opportunity cost of your time.
D. the actual value of the ticket.
E. the cost of food plus the opportunity cost of your time plus the actual value of the ticket.

Answer 1

Answer:  Option (C) is correct.

Explanation:

Opportunity cost is the benefit that is foregone for an individual by choosing one alternative over other alternatives available to him.

If the opportunity cost is lower for an individual then this will benefit him whereas if the opportunity cost is higher then this will not benefit the individuals.

Therefore, the cost of the ticket for this person is the cost of buying food while waiting in the line and the opportunity cost of his time which means that he would spend that time in earning some money income or something else.