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What is the opportunity cost in this scenario?Mikael has saved $4,000 for his trip to Brazil. He has calculated that his total "transportation" expenses will be $1,000. The "hotel" will cost him another $1,500. He will spend about $500 on "food". He plans on spending the remaining $1,000 for "sightseeing" and buying souvenirs.While booking his plane ticket, he realizes that the price has gone up. His total transportation expenses will go up by $200. He realizes that he cannot cancel his hotel reservation. He also doesn’t want to go cheap on food. Finally, he decides to give up visiting the popular Ouro Preto during his stay in Brazil.

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sarkhan2018

All the cost sums up to $4,000 when there is no extra charge. In this case, the opportunity cost is the same with the total cost. In this case Mikael is willing to forgo $4,000 for this opportunity and it makes his opportunity cost. However, since the transportation expenses become $1,200 instead of $1,000. We don't know exactly he buys this ticket or not, but since it is said that "while he was booking", we have to consider that he buys the ticket. The hotel costs $1,500 and it cannot be redeemed. However, $2,700 is a sunk cost, not an opportunity cost. Because in this case, Mikael does not have any alternative. He gave up from his decision in the end.

poona2339

The cost of opportunity in this scenario is Mikael decision to the forgo seeing Ouro Preto during his stay in the Brazil.

Cost of Opportunity is refers to the decision making process people use in the terms of how they spend their times, money or resources. This term was refers to the loss that a person suffer by picking a certain options. In this case, does't want Mikael to cut his foods budget. Instead, he pick to skip visiting Ouro Preto. So this represents how the Mikael is losing out on seeing this site in order to eat the food he wants while on the vacation.

All the cost of the sum up to the $4,000 when there are no extra charge. On this case, opportunity cost is the same as the total cost. In this case, Mikael is willing to the forgo $4,000 for this opportunity and it make his opportunity cost. So, since the transportation expenses become $1,200 rather than of $1,000. We don't know to exactly if he buy this ticket or not, but since it is said that "while he was booking", we have to consider that he buys ticket. The hotel costs $1,500 and it cannot be redeemed. However, $2,700 is the sunk the cost, not an opportunity cost. Because in this case, Mikael does not have any alternative. He gave up on his decision in the end.

Learn more about opportunity costs here https://brainly.com/question/12121515

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