Last year christine worked as a consultant. she hired an administrative assistant for$15,000 per year and rented office space (utilities included) for $3,000 per month. her total revenue for the year was $100,000. if christine hadn't worked as a consultant, she would have worked at a real estate firm earning $40,000 a year. christine's opportunity cost of working as a consultant last year was )$36,000b)$15,000c)$40,000d)$51,000
The answer is option (C). $40,000
Lets consider Christine's total cost per for working as a consultant;
Total cost per year=cost of hiring administrative assistant+total rent on office space per year
Cost of hiring administrative assistant=$15,000 per year
Total rent on office space per year=Amount paid per month×number of months in a year
Total rent on office space per year=(3,000×12)=$36,000 per year
Total cost per year=(36,000+15,000)= $51,000
Net revenue=Total revenue per year-total cost per year
Total revenue per year=$100,000
Total cost per year=$51,000
By choosing to work as a consultant she makes $49,000 a year, while losing the opportunity to earn $40,000 a year
Her opportunity cost=$40,000 a year
C C C C C
The question is "What's Stella's opportunity cost of working on her serve for an hour?" The rest of the info looks like it's meant to confuse you. They charge $10 an hour. She values an hour of her time at $20. I believe that means she would pay $20. Hope this helps!
Opportunity costs is the benefits an individual, investor or business misses out on when making another choice over another.
In the case of Claire she had to make a choice of working for three hours and earning $36 or going bungee jumping with her friend. The opportunity cost of going bungee jumping with her friend for three hours will be $36
According to the network,"If he/she farms the land, the opportunity cost is the income foregone by not renting it to a neighbor. If the cash rental rate is $150 per acre, the opportunity cost (income foregone) by farming the land and not renting it to the neighbor is $15,000 ($150 X 100 acres.)".
C) the enjoyment she would have received had she gone to the park.
Opportunity costs are the costs (or benefits lost) from choosing one activity (or investment) over another activity (or investment).
Since our resources are scarce, and time is one of the most scarce resources, we cannot do two completely different things at the same time. Melody has to choose between going to the park or going to work. If she decides to go to the park, her opportunity cost will be the money she could have earned working. But since she decided to go to work, her opportunity cost is the enjoyment she could have received by spending time on the park.
Opportunity cost: The opportunity cost is that cost which gives the best alternative option
The computation of the total cost is shown below:
= Earning per hour + admission fee
= $15 per hour + $9
Since the question is asking for the total cost, so we consider both the costs i.e earning per hour and admission fee.
It should be greater than $36
The opportunity cost of working is the amount of money sacrificed or could have earned if the individual was not working. In this case, Claire has decided to go with her friend which means that the opportunity cost of not working is less than the benefits receives from going out. Because she is not working it means that the opportunity cost of working is more than 36 dollars, which is the income she could have earned in 3 hours.