QUESTION 1.

One of Ed's favorite bands is playing in Philadelphia. Ed purchases a ticket ($50.00) and takes a day off work to get ready for the concert (Ed earns $80.00).

While standing on line to get into the venue, someone offers Ed $180 for his ticket, but he turns them down. From this, we can infer that the benefit Ed gets from attending the concert is at least _______ dollars (please record your answer without a dollar sign).

QUESTION 2.

n many cities, discount clubs are popular. For a fixed annual fee (paid in advance) one can purchase goods at 85% of their listed price (in other words, 15% off the list price); otherwise, one pays the list price. Suppose that the annual fee is $250 and the interest rate on your savings account is 4%. Finally, assume discount club's list prices are the same as any other store, and you plan to spend $1000 over the coming year at this store. (Hint: the interest represents an opportunity cost of purchasing a membership).

The benefit of buying a membership is____ dollars and the cost of buying a membership is_____ dollars. (Please record your answer without a dollar sign or a comma.)