Tuesday 13 May 2008

Eric Clapton versus Bob Dylan concert: The Question

A simple question taken from a very interesting book by Bob H Frank for everyone; doesn't matter whether you're an economist or not.

You've received a free promotional ticket to Eric Clapton concert which has no resale value. On the same night and at the same time, however, there is also a Bob Dylan concert. Bob Dylan is the only artist you'd ever consider going to listen to that night (apart from Eric Clapton, that is). On a normal day, you'd be willing to pay £50 for his ticket. The price of the Bob Dylan ticket for that night is actually £40.

Taken all of these information together, what is the opportunity cost - i.e. the cost of giving up the opportunity of doing one thing or consuming one thing and not the other - of going to see Eric Clapton concert? Is it:

A) £10
B) £40
C) £50
D) Zero.

Give yourself 5 minutes to think about this and post your answers in the comment below. No cheating now!

I'll reveal the answer in my next post...

1 comment:

Anonymous said...

There are several questions I have to know before I answer. For example,
1. Can I make money while the concert performs?
2. Will the upcoming Bob Dylan’s concern be his last concert?
3. Do I need to pay other expenses to go to each concert? And how much?

Anyway, without additional information, I prefer choice d).
I am also waiting for your answer!