I'm not really sure how to go about this question.
You earn $30/hr while working. You are trying to decide between buying an album in iTunes and downloading the songs, vs. finding the album using a new Peer‐2‐Peer (P2P) application that you have discovered.
• There is no time cost to download the application.
• The price of the iTunes application is $0. In iTunes, the price of the album is $10. It will take
you 1 minute to find the album in iTunes, and 5 minutes to download the album.
• The price of the P2P application is $5. The album price is $0. It will take you 20 minutes to
find the album, and 10 minutes to download the album.
• You do not have to stop working while downloading the album.
a. What is the opportunity cost of finding an album for each application?
For P2P: Time
b. What is the total cost of obtaining an album for each application?
c. If you already own the P2P application, then what is the total cost of obtaining an album?