Scenario 13-3
Kachina is a senior majoring in graphic design at Awesome University (AU). While she has been attending college, Kachina started a computer consulting business to help senior citizens learn how to use their iPads. Kachina charges $25 per hour for her consulting services. She also works 5 hours a week for the Economics Department to maintain that department's Web page. The Economics Department pays Kachina $20 per hour.
-Refer to Scenario 13-3. If Kachina can work additional hours at either job, what is the opportunity cost if she spends one hour reading a novel?
A)$20
B)$25
C)$100
D)$125

Question

Quizplus · Accepted Answer

Since Kachina can work additional hours at either of her jobs, the opportunity cost of spending one hour reading a novel is the amount of money she could have made if she had worked during that hour.

If Kachina had worked as a computer consultant, she could have earned $25 during that hour. If she had worked for the Economics Department, she could have earned $20 during that hour.

Therefore, the opportunity cost of spending one hour reading a novel is $25 (the amount she could have earned as a computer consultant during that hour), which is option B.

The best choice for Kachina would be to work as a computer consultant during that hour and earn $25, rather than spending time reading a novel.

Scenario 13-3 Kachina Is a Senior Majoring in Graphic Design at Awesome