Answer to Question #273605 in Microeconomics for lertao

Question

Daniel Mathews a footballer who is based in Sweden received a fine of $2 500 and a two-match suspension for use of performance-enhancing drugs. Daniel receives a match fee of $5 000 per match from the Sweden Footballers Board, plus additional appearance money of $10 000 per match from Adidas. He also pays $500 per match for comprehensive insurance against injury. In opportunity cost terms, the cost of this incident for Daniel Mathews is:

Answer 1

Fine =$2500 and 2 match suspension

Let us call each match x

Hence the income for Mathew is

$I=5000x+10000x-500x$

For 2 match suspension Mathew will incur a cost of

$I=5000(2)+10000(2)-500(2)\\=\$29000$

the cost of this incident for Daniel Mathews is:

$=29000+2500$

=$31500