Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

3. Determining opportunityr cost Suppose that Ciana is deciding whether or not to buy a pair of sneakers H1at she has been researching online, and

image text in transcribedimage text in transcribed
3. Determining opportunityr cost Suppose that Ciana is deciding whether or not to buy a pair of sneakers H1at she has been researching online, and also the best place to make her purchase. Three different stores in [he area sell the sneakers she likes, but some stores are more convenient for Ciana to reach man others. One option is her local shoe store located only 15 minutes away from where she works, where they charge a markedup price of $118 for the sneakers: Travel Time Each Way Price of a Sneakers Store (Minutes) (Dollars per sneakers) Local Shoe Store 15 118 Different Neighborhood in Town 30 96 Rural Outlet 60 78 Ciana earns an hourly wage of $26 at her job. In order to purchase her sneakers she will have to take time off work, so each hour away from her job costs her $26 in lost income. Assume that Ciana'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 Ciana incurs no additional costs other than the sneakers, such as gas. Complete the following table by computing the opportunity cost of Ciana's time and the total cost of shopping at each location. Opportunity Cost of Time Price of a Sneakers Total Cost Store (Dollars) (Dollars per sneakers) ( Dollars) Local Shoe Store 118 Different Neighborhood in Town 96 Rural Outlet 78 Assume that Ciana considers both her opportunity costs and the price of sneakers when making her shopping decision. Ciana will minimize her cost of buying the sneakers if she shops at the

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Global Marketing

Authors: Johny K Johansson

4th Edition

0072961805, 9780072961805

More Books

Students also viewed these Economics questions