Question

You are a professor of economics at a university.​ you've been offered the position of serving as department​ head, which comes with an annual salary that is ​$8 comma 5008,500 higher than your current salary.​ however, the position will require you to work 200 additional hours per year. suppose the next best use of your time is spending it with your​ family, which has value of ​$2020 per hour.

Answer 1

Answer:

$4500

Explanation:

We can calculate the total change in benefits by deducting the opportunity cost of spending the hours with your family by the annual salary.

Opportunity cost = $20/hour x 200 Additional hours

Opportunity cost = $4000

Total change in benefit = Annual salary - Opportunity cost

Total change in benefit  = $8500 - $4000

Total change in benefit  = $4500