Store Local Department Store Across Town Neighboring City Travel Time Each Way (
ID: 1143970 • Letter: S
Question
Store Local Department Store Across Town Neighboring City Travel Time Each Way (Minutes) 15 30 60 Price of a Suit (Dollars per suit) 102 63 uanita makes $18 an hour at work. She has to take time off work to purchase her suit, so each hour away from work costs her $18 in lost income Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling Complete the following table by computing the opportunity cost of Juanita's time and the total cost of shopping at each location. Opportunity Cost of Time (Dollars) Price of a Suit (Dollars per suit) 102 Total Cost Store Local Departmen Across Town Neighboring City store in the neighboring city (Dollars) store across town local department store Assume that Juanita price of the suit into consideration when she shops. Juanita will minimize the cost of the suit if she buys it from the Session Timeout 58:10Explanation / Answer
Opportunity cost calculation example:
Neighbouring city:
Total time spent in travel and shopping = 60 x 2 + 30 = 2.5 hours
Opportunity cost = 2.5 x 18 = $ 45
Total cost = Opportunity cost + Price
Juanita will minimize the cost of the suit if she buys it from the store in the neighbouring city. (minimum total cost)
Store Opportunity cost of Time ($) Price of a Suit ($) Total Cost ($) Local Department 18 102 120 Across Town 27 88 115 Neighbouring City 45 63 108