Question

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

Answer 1

Answer:D. Both b) and c) are correct.

Step-by-step explanation:

Since she can earn$25 per hr in her consulting job she does not need to earn less for any other job in order to maximize her income.

Opportunity cost is the cost of the alternative forgone which in this case is the income from consultimg forgone