Question

Kamryn is deciding between three potential activities on Saturday evening: 1) Staying at home and watching her favorite television show, an activity that she values at $18 and that entails no out-of-pocket costs. 2) Going to the movies with her sister to see the latest blockbuster action film, an activity she values at $30 and that entails $15 in out-of-pocket costs. 3) Going out to dinner with her best friend, an activity she values at $40 and that entails $23 in out-of-pocket costs. a) Which activity should Kamryn choose?

Answer 1

To determine the best activity for Kamryn, we calculate the net value of each activity by subtracting the out-of-pocket costs from the value Kamryn places on it. Staying at home and watching her favorite television show has the highest net value of $18. Therefore, Kamryn should choose this activity.

Step-by-step explanation:

To determine which activity Kamryn should choose, we need to compare the value she places on each activity with the out-of-pocket costs involved.

Activity 1: Staying at home and watching her favorite television show has a value of $18 and no out-of-pocket costs.

Activity 2: Going to the movies with her sister to see the latest blockbuster action film has a value of $30 and entails $15 in out-of-pocket costs.

Activity 3: Going out to dinner with her best friend has a value of $40 and entails $23 in out-of-pocket costs.

To determine the best choice, we need to calculate the net value of each activity (value - out-of-pocket costs).

Net value of Activity 1: $18 - $0 = $18

Net value of Activity 2: $30 - $15 = $15

Net value of Activity 3: $40 - $23 = $17

Therefore, Kamryn should choose to stay at home and watch her favorite television show as it has the highest net value.

Answer 2

A. Staying at home and watching her favorite television show an activity that she values at $18 and that entails no out-of-pocket costs.

Explanation

While Kamryn decides the activity to choose, there are factors to consider which include the expenses that will be incurred with that particular choice. In the first example, the costs are low and Kamryn will still spend the evening as comfortable as planned while saving some dollars.