Harold,a delivery man,washes and irons his own shirts.Sarah,his boss,sends her clothes to a laundry.Which is the most plausible economic explanation for this difference?

Question

Quizplus · Accepted Answer

The term "opportunity cost" refers to the cost of the next best alternative forgone. In this case, Harold may have a lower opportunity cost of washing and ironing his own shirts because his time may be worth less than Sarah's. Sarah may have a higher opportunity cost of washing and ironing her clothes because she may value her time more highly and thus may be willing to pay someone else to do it for her. Therefore, it is most plausible that Sarah sends her clothes to a laundry because her opportunity cost of washing and ironing her clothes is higher than Harold's.

Harold,a Delivery Man,washes and Irons His Own Shirts