Answer to Question #295454 in Microeconomics for arfan sadik

Question

. You are trying to decide whether to take a vacation. Most of the costs of the vacation (airfare, hotel, and forgone wages) are measured in dollars, but the benefits of the vacation are psychological. How can you compare the benefits to the costs?

Answer 1

The benefits that arise from taking a vacation differ from one person to another. Vacations are associated with peace,relaxation and quality time spent with family. The vacation costs are worth it if a person feels they need these psychological benefits.

When money is spend for pleasure the cost question is not counted since here the cost has no value as this money is spent for your pleasure which is a psychological matter and therefore comparing the cost to benefits never arise here.

It can be said that there exists an opportunity cost if the vacation gives you more psychological benefits. Then it can be concluded that the cost is cheaper compared to the benefits.