Chapter 4 >InQuizitivec Chapter 4: Market Outcomes and Tax Incidence Emily works

Question

Chapter 4 >InQuizitivec Chapter 4: Market Outcomes and Tax Incidence Emily works in the stockroom at a retail store for $10/hour on Saturdays. The store is within near walking distance of her home. She can make $15/hour by babysitting on Saturday, but she must spend $2 on gas to drive to her babysitting job. What costs must Emily consider when figuring out her willingness to sell? Select all that apply. Correct Answer(s) the cost of clothes and personal items (e.g,the $4 in direct costs she would spend to phone) Emily uses during babysitting drive to and from her babysitting job the opportunity costs of not working at the store on a Saturday when she babysits Incorrect Answer(s)

Explanation / Answer

Emily chooses between works in the stockroom at a retail store and works as a babysitter by opportunity cost. If Emily chooses to work in a retail store her opportunity cost is $(15-2)=$13. But if she chooses to work as babysitter her opportunity cost is $12. So she chooses to work as a babysitter as the opportunity cost of this work is less.

So the correct answer is the opportunity cost of not working at the store on a Saturday when she babysits.

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