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Fact 10.2.1
Consider the following three methods of preparing your tax return. Method A uses a personal computer (cost equal to $1,000)and 1 hour of your time. Method B uses a calculator (cost equal to $30)and 12 hours of your time. Method C uses pen and paper (cost equal to $1)and 2 days (16 hours)of your time.
-Consider Fact 10.2.1. Choose the best statement.
A)When your wage rate is $5 per hour, the economically efficient method is method C.
B)When your wage rate is $50 per hour, the economically efficient method is method B.
C)When your wage rate is $500 per hour, the economically efficient method is method A.
D)all of the above
E)B and C only

Question

Quizplus · Accepted Answer

When your wage rate is $5 per hour, the economically efficient method is method C because it has the lowest total cost ($1 + $5 * 16 = $81).When your wage rate is $50 per hour, the economically efficient method is method B because it has the lowest total cost ($30 + $50 * 12 = $630).When your wage rate is $500 per hour, the economically efficient method is method A because it has the lowest total cost ($1,000 + $500 * 1 = $1,500).

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