Tom richards, a local doctor, decides to play a round of golf on wednesday afternoon. the round of golf will take dr. richards five hours to complete (including travel time to and from the course). the out of pocket expenses for the green fees, lost golf balls, cart rental, gas expense, and tips to the bag boys total $80. a healthy lunch at the course, which he eats everyday, cost him $20. dr. richards earns $100 per hour at his practice. what is the opportunity cost of dr. richards' wednesday afternoon golf outing?

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04-08-2018
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Tom richards, a local doctor, decides to play a round of golf on wednesday afternoon. the round of golf will take dr. richards five hours to complete (including travel time to and from the course). the out of pocket expenses for the green fees, lost golf balls, cart rental, gas expense, and tips to the bag boys total $80. a healthy lunch at the course, which he eats everyday, cost him $20. dr. richards earns $100 per hour at his practice. what is the opportunity cost of dr. richards' wednesday afternoon golf outing?

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Answer: Opportunity cost of Dr. Richard's wednesday afternoon golf outing is $580.

Explanation: Opportunity cost as the name suggests is the cost of the lost alternative. In this case, when Dr. Richard chooses to play golf instead of going for his Dr.'s practice he is forgoing the earning which he could have earned from his practice.

As given in the problem, he could have earned $100 per hour from going to his practice. Since, playing golf takes 5 hours it means that he is sacrificing his 5 hours income from the practice. So, his opportunity cost should be $500. Moreover, he also spends $20 for lunch and $60 for his golf practice which he would not have spent in case if he didn't play golf.

Total Opportunity cost is $580