Question

Ch. 1 Help Save & Kamryn is deciding between th ) Staying at home and watching her favorite television show, an activity that she values at $18 and that entalls no out-of-pocket costs 2) Going to the movies with her sister to see the latest blockbuster action film, an activity she values at $30 and that entails $15 in out of-pocket costs 3) Going out to dinner with her best friend, an activity she values at $40 and that entails $23 in out-of-pocket costs. a) Which activity should Kamryn choose? O Going to the movies with her sister e Staying at home and watching her favorite show O Going out to dinner with her best friend b) What is Kamryn's opportunity cost of going to the movies? Instructions: If you are entering a negative number, be sure to include a negative sign () c) Relative to her next best alternative, what is Kamryn's economic surplus from going to the movies? Instructions: If you are entering a negative number, be sure to include a negative sign () < Prev . 5 of 15 ill Next >

Answer 1

	Value	Cost	Surplus
TV show	18	0	18
Movie	30	15	15
Dinner	40	23	17

a) Staying at home as the surplus is greater than movie and dinner

b) Opportunity cost of movie is forgoing the next best alternative which is $18

c) Economic Surplus from going to movie is $15