Scenario 13-9
Jessica makes photo frames. She spends $5 on the materials for each photo frame. She can create one photo frame in an hour. She earns $10 per hour at a part-time job at the local coffee shop. She can sell a photo frame for $30 each.
-Refer to Scenario 13-9.An economist would calculate the total cost for one photo frame to be
A) $5.
B) $10.
C) $15.
D) $25.

Question

Quizplus · Accepted Answer

The total cost for one photo frame includes the cost of materials and the opportunity cost of Jessica's time. She spends $5 on materials and can create one photo frame in an hour. Therefore, the opportunity cost of her time is $10. Adding the cost of materials and opportunity cost of time, the total cost for one photo frame is $15 (materials cost of $5 + opportunity cost of time of $10).

Scenario 13-9 Jessica Makes Photo Frames. She Spends $5 on the Materials