Question

Who do you think Mary should hire for a 3-hour job and why?

a. Mary should hire the landscaping service; 3 hours of labor would cost $23, while the neighbor would charge $30.
b. Mary should hire the landscaping service; 3 hours of labor would cost $30, while the neighbor would charge $39.
c. Mary should hire her neighbor; 3 hours of labor would cost $39, while the landscaping service would charge $30.
d. Mary should hire her neighbor; 3 hours of labor would cost $30, while the landscaping service would charge $39.

Answer 1

The opportunity cost of the consultant growing her own vegetables is higher than the cost of purchasing them, making it more economical to work the high-paying job and buy the vegetables.

Step-by-step explanation:

The economic concept at play here is called opportunity cost, which is the cost of an alternative that must be forgone in order to pursue a certain action. In this case, the consultant earning $200 per hour has to consider the opportunity cost of using her time to grow vegetables instead of working at her consulting job. It makes more economic sense for her to spend her time earning money at her high-paying job and then purchasing vegetables, because the money she would earn by working for an hour far exceeds the cost of buying vegetables.

When she earns $200 in an hour, the consultant can buy more vegetables than she could grow in the same amount of time, especially since she's not skilled at gardening. Moreover, the time and effort required to become good at gardening could be substantial, and the costs of supplies and tools also need to be considered.