Juanita makes $26 an hour at work. She has to take time off work to purchase her suit, so each hour away from work costs her $26 in lost income.
Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer
the following questions, ignore the cost of gasoline and depreciation of her car when traveling.
Complete the following table by computing the opportunity cost of Juanita's time and the total cost of shopping at each location.
Opportunity Cost of Time Price of a Suit Total Cost
Store
(Dollars)
(Dollars per suit) (Dollars)
Local Department Store
112
Across Town
24.00
89
113.00
Neighboring City
40.00
70
Assume that Juanita takes opportunity costs and the price of the suit into consideration when she shops. Juanita will minimize the cost of the suit if
she buys it from the