Question

Let us consider an olive grove. When the grove began in the 1990s, the olive trees were planted. Today, you have purchased the grove. The trees must be watered and fertilized. You have drip irrigation on timers to take care of the watering. You hire workers to do the fertilizing. Workers also keep the area clear of competing vegetation, using a small tractor. Herbicides may be applied by the workers. Workers also remove trees that have died and plant new ones from seedlings. The main chore for the workers is the picking of the olives and the hauling of them to the processor. There are some buildings needed to keep the tractor and other equipment. Let us examine the costs.

Let us assume that we hire six full-time workers (or the equivalent). Each is paid $12,000 per year ($1,000 per month), making the labor cost equal $72,000. The company has buildings. It has machinery, such as the tractor, the trucks, saws, shovels, and so forth, as well as buildings. Our measure of cost here is the part of the building and machines used up during the year (called depreciation). Let us assume that the cost of all of this capital for the year is $16,000. Let us assume that the owne earning 5% interest, we will assume here that owner does not work in this business.
The explicit costs of owning the olive grove are $_____

Answer 1

It makes more economic sense for the consultant to spend her time at the consulting job and shop for her vegetables because she earns $200 per hour as a consultant and likely has specialized skills and knowledge in that field.

Step-by-step explanation:

It makes more economic sense for the consultant to spend her time at the consulting job and shop for her vegetables because she earns $200 per hour as a consultant. By spending her time on the higher-paying consulting job, she can earn more money compared to trying to grow vegetables herself.

Additionally, being a consultant likely requires specialized skills and knowledge that the consultant has developed over time. By focusing on her area of expertise, she can provide valuable services to clients and command a higher hourly rate.

On the other hand, growing vegetables may not be the consultant's strength, and she may not have the necessary knowledge, time, or resources to do it efficiently. It would be more cost-effective for her to spend her time on the consulting job and use the money she earns to purchase vegetables from a store or farmer's market.