Doris Wheaton has 10 bags of cement in her garage. The bags cost $4 per bag last year when they were purchased. The store now sells the cement for $5 per bag but does not take returns. A neighbor, however, told Doris he would buy the cement from her for $3 per bag if she did not want them. Doris is considering using the cement to make a patio.
a. If Doris uses the 10 bags of cement to make her patio and has no other use for the cement, what is the opportunity cost of using the cement?
b. If Doris must also rebuild her front steps (which requires 20 bags of cement), what is the opportunity cost of her existing 10 bags of cement?
