Sophia is an architect and she is trying to decide whether to hire Jacob, a draftsman, to assist with her work. Sophia could hire Jacob at $20 per hour but it would take him three times as long to complete a task as it takes Sophia. Sophia is able to earn $90 per hour and has more architectural jobs than she is able to handle. Which of the following is true?
A) Sophia should not hire Jacob because it would be faster for her to do the work herself.
B) Sophia should do the drafting work herself because she has the lower opportunity cost.
C) Jacob should be hired at the $20 per hour wage rate.
D) Jacob should be hired, but only if he is paid more than $30 per hour.

Question

Quizplus · Accepted Answer

Sophia should hire Jacob because her opportunity cost of doing the work herself is $90 per hour, while hiring Jacob at $20 per hour, even if he takes three times longer, is still more cost-effective.

Sophia Is an Architect and She Is Trying to Decide