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Can implicit costs make every option not worth doing?

Economics Asked on September 2, 2021

I’m new to microeconomics so sorry if this is simplistic, but if an action should only be taken when benefits > costs and opportunity costs are included in cost calculations, how would one deal with situations that arise when implicit costs make either choice not worth doing? For example, if you have the option to see a movie or go bowling at the same time, and the movie ticket is 10 dollars with 12 dollar benefit and the bowling entry is 15 dollars with 17 dollar benefit, wouldn’t that make the costs (including opportunity cost) of the movie 27 and bowling 27, both higher than their benefits, so a person should choose to do neither? This seems illogical so I’m sure I am missing something.

One Answer

As correctly pointed out by @Herr K., the opportunity cost of forgoing a movie (bowling) and going bowling (to a movie) is $2.

Hence, the net payoff from going to a movie = benefit - cost = 12 - (10+2) =0. Similarly, the net payoff from going bowling is 17-(15+2) = 0 Hence the consumer should be indifferent between bowling and going to a movie.

Correct answer by user28372 on September 2, 2021

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