Notion of opportunity cost.

Prompt: The Cost of Something Main idea: What is meant by an “opportunity cost?” In principles of microeconomics we see that it applies to (1) individuals, (2) households, (3) firms, and (4) societies. How does the notion of opportunity cost help decision-makers decide between alternatives? Part A): From an individual perspective, imagine that you have $150 to see a concert. You can either see Bruno Mars or you can see Imagine Dragons. Assume that you value the Bruno Mars concert at $225 and the Imagine Dragons concert at $150. Tickets for both concerts are priced at $150 per ticket, but it will take you a couple of hours to drive to another town to see the Bruno Mars concert and you have to be in school the next morning for an exam. The Imagine Dragons concert is right here in town. Explain how you would assess the opportunity cost of seeing Bruno Mars in concert compared to Imagine Dragons. Part B): Give examples (like the one above), to demonstrate how (2) households, (3) firms, and (4) societies also face and must assess opportunity costs.