Question

plss help!!!

Your classmates from the University of Chicago are planning to go to Miami for spring break, and you are undecided about whethe you should go with them. The round-trip airfare is $600, but you have a frequent-flyer coupon worth $500 that you could use to pay part of the airfare. All other costs for the vacation are exactly $900. The most you would be willing to pay for the trip is $1,400. Your only alternative use for your frequent-flyer coupon is for your trip to Atlanta two weeks after the break to attend your sister's graduation, which your parents are forcing you to attend. The Chicago-Atlanta round-trip airfare is $450. Should you use the frequent flyer coupon to go to Miami? Multiple Choice Yes, your benefit is more than your cost No, your benefit is less than your cost Yes, your benefit is equal to your cost No, because there are no benefits in the trio < Prev 10 of 30 Next >

Answer 1

Answer

Yes, your benefit is more than your cost

If you go to Miami

Costs = 500 + 900 = 1400

Benefit = 1400

Net Benefit = 1400 - 1400 =0

If you go to Atlanta

Costs = 450

Benefit = 0

Net Benefit = 0 - 450 = -450

After putting consideration to opportunity cost

Final net benefit (Miami) = 0 - (-450) = 450

Final net benefit (Atlanta) = -450 - 0 = -450

Thus you should go to Miami

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