Assume that Juanita considers both her opportunity costs and the price of sandals when making her shopping decision. Juanita will minimize her cost of buying the sandals if she shops at the
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Step 1: Consider the opportunity cost of buying the sandals, which includes the value of the next best alternative that Juanita would have chosen instead of buying the sandals. Show more…
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2. Determining opportunity cost Juanita is deciding whether to buy a suit that she wants, as well as where to buy it. Three stores carry the same suit, but it is more convenient for Juanita to get to some stores than others. For example, she can go to her local store, located 15 minutes away from where she works, and pay a marked-up price of $103 for the suit: Store Travel Time Each Way Price of a Suit (Minutes) (Dollars per suit) Local Department Store 15 103 Across Town 30 89 Neighboring City 60 63 Juanita makes $16 an hour at work. She has to take time off work to purchase her suit, so each hour away from work costs her $16 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. Assume that Juanita takes opportunity costs and the price of the suit into consideration when she shops. Juanita will minimize the cost of the suit if she buys it from the _______ A) store in neighbouring city B) local departmentstore C) . store across town
Akash M.
1. Determining opportunity cost Juanita is deciding whether to buy a dress that she wants, as well as where to buy it. Three stores carry the same dress, but it is more convenient for Juanita to get to some stores than others. For example, she can go to her local store, located 15 minutes away from where she works, and pay a marked-up price of $103 for the dress: Marked-up price Discounted price Juanita's office Original price Store Local Department Store Across Town Neighboring City Travel Time Each Way (Minutes) Price of a Dress (Dollars per dress) 15 103 30 85 60 63 Juanita makes $16 an hour at work. She has to take time off work to purchase her dress, so each hour away from work costs her $16 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. Store Local Department Store Across Town Neighboring City Opportunity Cost of Time (Dollars) Price of a Dress (Dollars per dress) Total Cost (Dollars) 103 85 63 Assume that Juanita takes opportunity costs and the price of the dress into consideration when she shops. Juanita will minimize the cost of the dress if she buys it from the
Supreeta N.
Suppose that Juanita is deciding whether or not to buy a pair of boots that she has been researching online, and also the best place to make her purchase. Three different stores in the area sell the boots she likes, but some stores are more convenient for Juanita to reach than others. One option is her local shoe store located only 15 minutes away from where she works, where they charge a marked-up price of $114 for the boots. Juanita earns an hourly wage of $16 at her job. In order to purchase her boots she will have to take time off work, so each hour away from her job costs her $16 in lost income. Assume that Juanita’s travel time is the same each way (to and from the store) and that it will take her 30 minutes once she reaches a store to complete her shopping. Assume throughout the question that Juanita incurs no additional costs other than the boots, such as gas. What is the opportunity cost of time and total cost if the boots are $114?
Danielle F.
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