Refer to Table 3.2,which shows some costs and benefits of having your car repaired.Suppose you use your car to deliver pizzas.If you earn $10 per hour delivering pizzas,what is your best choice of hours to spend on car repairs?
A) 2
B) 3
C) 4
D) 5

Question

Refer to Table 3.2,which shows some costs and benefits of having your car repaired.Suppose you use your car to deliver pizzas.If you earn $10 per hour delivering pizzas,what is your best choice of hours to spend on car repairs? 
A) 2 
B) 3 
C) 4 
D) 5

Quizplus · Accepted Answer

To find the best choice of hours to spend on car repairs, we need to compare the cost of repairs and the opportunity cost of the time spent on repairs. From the table, we can see that the cost of repairs is highest at 4 hours ($300), but the benefit of having a repaired car also increases with the number of hours spent on repairs.

However, if we choose to spend more hours on repairs, we will have less time to deliver pizzas and earn money. Therefore, we need to calculate the opportunity cost of the time spent on repairs.

At 2 hours of repairs, we would have 6 hours left for pizza delivery and earn $60 ($10 x 6) in total.

At 3 hours of repairs, we would have 5 hours left for pizza delivery and earn $50 ($10 x 5) in total.

At 4 hours of repairs, we would have 4 hours left for pizza delivery and earn $40 ($10 x 4) in total.

At 5 hours of repairs, we would have 3 hours left for pizza delivery and earn $30 ($10 x 3) in total.

From the above calculations, we can see that spending 4 hours on car repairs would give us the highest benefit ($200) even though we would earn less money from pizza delivery compared to spending fewer hours on repairs. Therefore, the best choice would be to spend 4 hours on car repairs.