You are going to buy a new computer at a downtown store that is a 25-minute driv

Question

You are going to buy a new computer at a downtown store that is a 25-minute drive each way and has the computer for $900.  You earn $14 per hour at your job and will have to take time off to go buy the computer.  You can expect to spend 40 minutes in the store making your purchase.  What is the opportunity cost of buying the computer?  Enter an answer such as 42.00 or 34.50, with two decimal places.

You are going to buy a new computer at a downtown store that is a 25-minute drive each way and has the computer for $897.  You earn $12 per hour at your job and will have to take time off to go buy the computer.  You can expect to spend 40 minutes in the store making your purchase.  What is the implicit cost of buying the computer?  Enter an answer such as 42.00 or 34.50, with two decimal places.  

Explanation / Answer

1.) 50 minues roundtrip for driving plus 40 minutes in the store means 90 minutes to buy the computer when you could have otherwise been working. Since you took 90 minutes off work, and can make $14 an hour, your opportunity cost is $21.00

2.) Same as above, the total time spent buying the computer is 90 minutes, but now you're earning $12 an hour, so the opportunity cost is $18. Implied cost, however, includes the cost of the computer, or $897 + $18, so the implied cost of the computer is $915.00

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