Question

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?
a.Harold must enjoy ironing more than Sarah does.
b.Harold must be better at ironing than Sarah is.
c.The opportunity cost of ironing is greater for Harold.
d.Sarah has a higher opportunity cost of laundering her clothes than Harold does.

Answer 1

Answer: Sarah has a higher opportunity cost of laundering her clothes than Harold does.

Explanation:

The opportunity cost is the cost of choosing an option out of a set of available options to an individual. Sarah is wealthier than Harold, therefore sending her clothes to the laundry is easier for her than it is for Harold, therefore Sarah has a higher opportunity cost than John doing laundry, because she can easily pay to get the Job done, which is not the case for John.