A government contractor hires a worker to help build a road for an annual wage of $50,000.The worker's annual output is worth $60,000.If the worker did not have this job,the worker would have produced $40,000 a year in an alternative job and would have been paid $30,000 a year.The real cost of using this worker to build the road is
A) $30,000.
B) $40,000.
C) $50,000.
D) $60,000.

Question

Quizplus · Accepted Answer

The real cost of using the worker to build the road is the difference between what he could have produced in his alternative job and what he is being paid for the current job. In this case, if the worker did not have this job, he would have produced $40,000, but since he is being paid $50,000, the real cost is only $10,000 ($50,000 - $40,000). Therefore, the best choice is B.

A Government Contractor Hires a Worker to Help Build a Road