<p>The question cannot be answered based on the information provided and assuming only knowledge of <span class="math-container">$X$</span>.</p>
<p>First, note that the price of the classical music concert ticket is irrelevant, since you already have a free ticket (and it is tacitly assumed that you cannot sell it).</p>
<p>Let <span class="math-container">$X&gt;0$</span> be the WTP for the film music and dance event, and let <span class="math-container">$Y&gt;0$</span> be the WTP for the classical music concert concert. Set the utility of staying at home to <span class="math-container">$0$</span>. Then your utilities (measured in Rs.) for the two events are <span class="math-container">$X-300$</span> and <span class="math-container">$Y-0=Y$</span>, respectively. This implies that (i) you will not stay at home, and that (ii) you will go to the classical music concert if <span class="math-container">$X\le 300$</span>. But for <span class="math-container">$X&gt;300$</span> the answer also depends on <span class="math-container">$Y$</span>.</p>
<p>Also, I would advise not to try thinking through this in terms of opportunity costs. This is likely to <a href="https://www.degruyter.com/document/doi/10.2202/1538-0645.1469/html" rel="nofollow noreferrer">increase confusion</a>.</p>

CC BY-SA 4.0
2024-09-09T11:56:30.237Z
I think it would be better if we think in terms of Consumer Surplus. I was thinking of some other way to solve when I found that in case of the classical music concert, my surplus is 500. However, in case of the film music and dance event, my surplus will be X-300. So, we should go to that place which leads us to a greater surplus. If X>800, the latter is preferred. If X<800, the former is preferred and if X=800, we might as well do any one. Please point out if I have a flaw in my reasoning.
MathsBaba
CC BY-SA 4.0
2024-09-10T07:31:55.773Z
Consumer surplus is usually defined as the difference of your WTP and what you actually pay. But that's just what I called utility. If you go to the classical music concert, your WTP is Y (in my notation) and what you actually pay is zero, so CS = Y. The price of the ticket for the classical music concert is irrelevant if you don't have to pay it.
VARulle
CC BY-SA 4.0
2024-09-11T08:40:04.747Z
Ok. Yes, it makes much more sense now. Thanks
MathsBaba
CC BY-SA 4.0
2024-09-02T11:47:52.120Z
2024-09-02T11:55:53.943Z
2024-09-02T11:55:53.943Z
VARulle
<p>You have a free ticket to attend a classical music concert. If you had to pay for the ticket, you would have to pay Rs. 500/- to attend the concert. On the same evening, you have an alternative entertainment option, namely to enjoy a film music and dance event for which tickets are priced at Rs. 300/- each. Suppose your maximum willingness to pay for the event is Rs. X to attend the film music and dance event. What will you do, i.e., will you attend the classical music concert, or the film music and dance show, or does he do neither? Justify your answer.</p>
<p>I have encountered this question while going through my Economics Assignment. I tried to solve this in the following way.</p>
<p>The classical music concert is free, but its usual cost is Rs. 500.
The film music and dance event costs Rs. 300.</p>
<p>So, I formulated the following decision criteria</p>
<p>If <span class="math-container">$&lt;300$</span>, your willingness to pay for the film music and dance event is less than its cost, so you won't attend it.</p>
<p>If <span class="math-container">$\geq 300$</span>, you are willing to pay at least the ticket price for the film music and dance event.</p>
<p>Now we compare the alternatives.</p>
<p>If <span class="math-container">$&lt;300$</span>, the best choice is to attend the classical music concert since it is free.
If <span class="math-container">$\geq 300$</span>, we need to consider the utility or enjoyment from both events. If the utility from the classical music concert is greater or equal to the film music event, attend the concert. Otherwise, attend the film music and dance event.</p>
<p>However, I am unable to rigorously write it down using well established economic concepts and problem solving techniques. It would be a great help if someone could help me out here.</p>

<supply-and-demand><decision-theory><opportunity-cost>
Decision-Making Under Opportunity Cost for Entertainment Choices if one option is free but the other incurs some cost
MathsBaba
# Decision-Making Under Opportunity Cost for Entertainment Choices if one option is free but the other incurs some cost

(Asked by: username_0 on 2024-09-01)

You have a free ticket to attend a classical music concert. If you had to pay for the ticket, you would have to pay Rs. 500/- to attend the concert. On the same evening, you have an alternative entertainment option, namely to enjoy a film music and dance event for which tickets are priced at Rs. 300/- each. Suppose your maximum willingness to pay for the event is Rs. X to attend the film music and dance event. What will you do, i.e., will you attend the classical music concert, or the film music and dance show, or does he do neither? Justify your answer.

I have encountered this question while going through my Economics Assignment. I tried to solve this in the following way.

The classical music concert is free, but its usual cost is Rs. 500.
The film music and dance event costs Rs. 300.

So, I formulated the following decision criteria

If $<300$, your willingness to pay for the film music and dance event is less than its cost, so you won't attend it.

If $\geq 300$, you are willing to pay at least the ticket price for the film music and dance event.

Now we compare the alternatives.

If $<300$, the best choice is to attend the classical music concert since it is free.
If $\geq 300$, we need to consider the utility or enjoyment from both events. If the utility from the classical music concert is greater or equal to the film music event, attend the concert. Otherwise, attend the film music and dance event.

However, I am unable to rigorously write it down using well established economic concepts and problem solving techniques. It would be a great help if someone could help me out here.

**Tags:** supply-and-demand, decision-theory, opportunity-cost


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## 1 answers

### Answer by username_1 on 2024-09-02. Score: 1

The question cannot be answered based on the information provided and assuming only knowledge of $X$.

First, note that the price of the classical music concert ticket is irrelevant, since you already have a free ticket (and it is tacitly assumed that you cannot sell it).

Let $X>0$ be the WTP for the film music and dance event, and let $Y>0$ be the WTP for the classical music concert concert. Set the utility of staying at home to $0$. Then your utilities (measured in Rs.) for the two events are $X-300$ and $Y-0=Y$, respectively. This implies that (i) you will not stay at home, and that (ii) you will go to the classical music concert if $X\le 300$. But for $X>300$ the answer also depends on $Y$.

Also, I would advise not to try thinking through this in terms of opportunity costs. This is likely to [increase confusion](https://www.degruyter.com/document/doi/10.2202/1538-0645.1469/html).

> **Comments:**
> **username_0**: I think it would be better if we think in terms of Consumer Surplus. I was thinking of some other way to solve when I found that in case of the classical music concert, my surplus is 500. However, in case of the film music and dance event, my surplus will be X-300. So, we should go to that place which leads us to a greater surplus. If X>800, the latter is preferred. If X<800, the former is preferred and if X=800, we might as well do any one. Please point out if I have a flaw in my reasoning.  
> **username_1**: Consumer surplus is usually defined as the difference of your WTP and what you actually pay. But that's just what I called utility. If you go to the classical music concert, your WTP is Y (in my notation) and what you actually pay is zero, so CS = Y. The price of the ticket for the classical music concert is irrelevant if you don't have to pay it.  
> **username_0**: Ok. Yes, it makes much more sense now. Thanks  

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