Question
Mr.Wilson has an avocado tree in his yard. In the spring, he sent $50 on fertilizer for his tree. His efforts paid off this fall
Mr.Wilson has an avocado tree in his yard. In the spring, he sent $50 on fertilizer for his tree. His efforts paid off this fall with a crop of 100 avocados. He can either eat the avocados himself or sell them to Dennis, a boy in his neighborhood. Dennis operates a fruit stand on Saturday. During the week, he buys avocados from his neighbors for $ 1 per avocado. On Saturday, he sells these avocados for $2 per avocado. What is Mr.Wilson's opportunity cost of eating an avocado from his tree?
Alice has rented an apartment. The previous occupant left a couch in good condition. Jose would have been willing to pay as much as $400 for the couch, and he could sell it for $ 500. What is the opportunity cost of keeping the couch?
I am confused about these kinds of opportunity cost. I do not know how to calculate them. Please give me some idea about solving these kinds of questions.
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