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. Which of the following statements is correct?
A)Kachina should increase the number of hours she works for the Economics Department to make her income comparable to her consulting business income.
B)Kachina cannot be maximizing her well-being if she continues to work for the Economics Department.
C)If Kachina chooses one hour at the beach with her friends rather than spend one more hour with a consulting client, the forgone income of $25 is considered a cost of the choice to go to the beach.
D)Both b) and c) are correct

Question

Quizplus · Accepted Answer

The forgone income of $25 is considered the opportunity cost of choosing one hour at the beach with friends over spending one more hour with a consulting client. This is because Kachina could have earned $25 during that hour if she chose to work instead. Option A and B are incorrect since there is no indication that Kachina wants to increase her income or that working for the Economics Department is not maximizing her well-being.

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