Answer:
It will puchase the skirt across town as it has the less economic cost.
Explanation:
We are going to add up the opportunity cost (lost wages) to the cost of the skirt:
travel-time* Price **Opp. Cost Economic Cost
local department 30 $ 112.00 $ 13.00 $ 125.00
across town 60 $ 89.00 $ 26.00 $ 115.00
neighboring city 120 $ 70.00 $ 52.00 $ 122.00
*travel-time we multiple the time it took each eway by 2
**Opp. Cost = wages per hour x travel time / 60
Then, the economic cost is the sum of the value of the skirt and the lost wages.
We pick the lowest economic cost.