Case 1.

1: The Hong Kong Hilton

Case 1.1: The Hong Kong Hilton

Why was it profitable to demolish a profitable Hong

Kong hotel?
The hotel was profitable.
It was expected to be profitable in the future.
Breaking the management contract was costly.

Case 1.1 : The answer

CHAPTER 1: Avoid Pitfalls!

Opportunity Cost = value of the best foregone

alternative to any decision
All actions imply an opportunity costs
Opportunity costs = true economic costs

Case 1.2: How much does it cost to go to

Penn?

Case 1.2 : How much does it cost to go to

Penn?
Tuition and fees: 47,668
Penn Tuition and Fees: 2014-2015

Case 1.2 : Is this the true cost?

All actions opportunity costs

Logistics:
Canvas
Rebecca Stein
rstein2@econ.upenn.edu
Thursdays, 3:30 to 5:30pm in the Collaborative Classroom, 1st
floor of Van Pelt
Office: 541 McNeil bldg.

How NOT to study:

It is not about memorization!

Case 1.3 : How much does it cost to raise a child?

USDA Estimates on Expenditures on Children by

Families
What is included?
What is missing?

Case 1.3 : Is this the true cost?

All actions opportunity costs

* Folbre, N. (2008). Valuing Children: Rethinking the Economics of the Family. Cambridge, MA: Harvard University Press.

Case 1.4: MBA enrollment and economic

cycles

What effect will the current recession

have on MBA applications & enrollment?