Government has the power to requisition people's labor, making the on-budget costs

negligible. However, the true social costs are not 0. For people who are employed a

common practice is to use their wage rate as a proxy for the opportunity cost of their time

For those that do not participate in the market for paid work we need to develop shadow

prices. Assume a project will take a homemaker, who takes care of two children under 5

vears old, away from home (such as to be sequestered for a jury) for 7 days. You can get

some idea of the value of many different paid jobs from the bureau of labor statistics. Key considerations for estimating the value of time are usually how many hours and at what

rate(s). How much do you think you should use as a shadow price for this person's time in

your benefit cost analysis? BRIEFLY explain your choices and give the total estimated

cost.