xeMrdTao Cengage Learning GJanita makes S50 an hour at C N

xeMrdTao . Cengage Learning GJanita makes S50 an hour at - C Not Secure ngcengage.comistatic/nbMinderhtml?nbld-727143&nbNodeld-274198112;&eisBN;_9781305404328eapare MINDTAP Aplia Homework: Economics: Eight Powerful Ideas Due on Feb 2 at 1159 PM MST Travel Time Each Way (Minutes) 15 30 Price of a Suit (Dollars per suit) 129 86 63 Local Department Store Neighboring City Juanita makes $50 an hour at work. She has to take time off work to purchase her suit, so each hour away from work costs her $50 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 foilowing questions, ignore the cost of gasoline and depreclation 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) 129 86 63 Total Cost Store Local Department Store Across Town Neighboring City (Dollars) Assume that Juanita takes she buys it from the opportunity costs and the price of the suit into consideration when she shops. Juanita will minimize the

Solution

Correct Answer:

Across town

Total cost of a suit (Across town) = (30*2 + 30)*50/60   + 86 = $161

It is the lowest cost among all the alternatives.

Store	Opportunity cost of time (dollars)	Price of a suit ($ per suit)	Total cost ($)
Local department store	50	129	179
Across Time	75	86	161
Neighbouring city	125	63	188