Answer to Question #67432 in Macroeconomics for Umair

Question #67432
The Economy Tomorrow section provides estimates of time spent in traffic delays. If the average worker produces $90 of output per hour, what is the opportunity cost of a) Current traffic delays? b) Estimated delays in 10 years?
1
Expert's answer
2017-04-17T09:44:05-0400
Opportunity cost is the value of alternative opportunity, which is given up in favor of anything.
Therefore, if a worker spends 1 hour a day in traffic delays, the opportunity cost is $90.
Assuming that a worker works 250 days per year, opportunity cost in 10 years is:
1 x 250 x 10 x 90 = $225,000

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