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?
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