2. Determining opportunity cost Juanita is deciding whether to buy a skirt that she wants, as well as where to buy it. Three stores carry the same skirt, but it is more convenient for Juanita to get to some stores than others. For example, she can go to her local store, Discounted price located 15 minutes away from where she works, and pay a Marked-up price marked-up price of $122 for the skirt: Juanita's office Original price Travel Time Each Way Price of a Skirt Store (Minutes) (Dollars per skirt) Local Department Store 15 122 Across Town 30 90 Neighboring City 60 78 Juanita makes $60 an hour at work. She has to take time off work to purchase her skirt, so each hour away from work costs her $60 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 Price of a Skirt Total Cost Store (Dollars) (Dollars per skirt) (Dollars) Local Department Store 122 Across Town 90 Neighboring City 78 Assume that Juanita takes opportunity costs and the price of the skirt into consideration when she shops. Juanita will minimize the cost of the skirt she buys it from the
2. Determining opportunity cost Juanita is deciding whether to buy a skirt that she wants, as well as where to buy it. Three stores carry the same skirt, but it is more convenient for Juanita to get to some stores than others. For example, she can go to her local store, Discounted price located 15 minutes away from where she works, and pay a Marked-up price marked-up price of $122 for the skirt: Juanita's office Original price Travel Time Each Way Price of a Skirt Store (Minutes) (Dollars per skirt) Local Department Store 15 122 Across Town 30 90 Neighboring City 60 78 Juanita makes $60 an hour at work. She has to take time off work to purchase her skirt, so each hour away from work costs her $60 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 Price of a Skirt Total Cost Store (Dollars) (Dollars per skirt) (Dollars) Local Department Store 122 Across Town 90 Neighboring City 78 Assume that Juanita takes opportunity costs and the price of the skirt into consideration when she shops. Juanita will minimize the cost of the skirt she buys it from the
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:2. Determining opportunity cost
Juanita is deciding whether to buy a skirt that she wants, as
well as where to buy it. Three stores carry the same skirt,
but it is more convenient for Juanita to get to some stores
than others. For example, she can go to her local store,
Discounted
price
located 15 minutes away from where she works, and pay a
Marked-up
price
marked-up price of $122 for the skirt:
Juanita's office
Original price
Travel Time Each Way
Price of a Skirt
Store
(Minutes)
(Dollars per skirt)
Local Department Store
15
122
Across Town
30
90
Neighboring City
60
78
Juanita makes $60 an hour at work. She has to take time off work to purchase her skirt, so each hour away from work costs her $60 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
Price of a Skirt
Total Cost
Store
(Dollars)
(Dollars per skirt)
(Dollars)
Local Department Store
122
Across Town
90
Neighboring City
78
Assume that Juanita takes opportunity costs and the price of the skirt into consideration when she shops. Juanita will minimize the cost of the skirt if
she buys it from the
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