Neema has just spent one hour roller skating with her friends and is trying to decide whether to skate for another hour. Each hour of roller skating costs $7, plus a one-time skate rental fee of $6. Skating for another hour will make Neema one hour late for her job, where she earns $13 per hour. Which of the following statements is true?
I. The $6 skate rental fee is a sunk cost.
II. The opportunity cost of skating for one more hour is $13.
III. Neema should keep skating if the value she places on skating for one more hour is at least $20.

Question

Quizplus · Accepted Answer

I. The $6 skate rental fee is a sunk cost.III. Neema should keep skating if the value she places on skating for one more hour is at least $20.

Neema Has Just Spent One Hour Roller Skating with Her