Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Question 06: Marginal Principle: How Many Hours at the Barber Shop? The
opportunity cost of your time spent cutting hair at your barber shop is $20 per hour.
Electricity costs $6 per hour, and your weekly rent is $250. You normally stay open
nine hours per day. (b) If you expect to give two haircuts in the 10th hour and you
charge $15 per haircut, is it sensible to stay open for the extra hour? Why?
O
A)
OB)
Yes, since the marginal benefit (the revenue from the two haircuts) is
GREATER THAN the marginal cost.
Yes, since the marginal benefit (the revenue from the two haircuts) is LESS
THAN the marginal cost.
C)
No, since the marginal benefit (the revenue from the two haircuts) is LESS
THAN the marginal cost.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F64cce7d5-c4c1-471c-a418-b18f1b36abb8%2Fa80d73f6-dc88-4a7c-b1b8-4c63dc573895%2Fn4l829h_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question 06: Marginal Principle: How Many Hours at the Barber Shop? The
opportunity cost of your time spent cutting hair at your barber shop is $20 per hour.
Electricity costs $6 per hour, and your weekly rent is $250. You normally stay open
nine hours per day. (b) If you expect to give two haircuts in the 10th hour and you
charge $15 per haircut, is it sensible to stay open for the extra hour? Why?
O
A)
OB)
Yes, since the marginal benefit (the revenue from the two haircuts) is
GREATER THAN the marginal cost.
Yes, since the marginal benefit (the revenue from the two haircuts) is LESS
THAN the marginal cost.
C)
No, since the marginal benefit (the revenue from the two haircuts) is LESS
THAN the marginal cost.
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