Question

Eleanor and Darnell need to decide which one of them will take time off from work to complete the rather urgent task of shearing their llamas. Eleanor is pretty good with a pair of shears; she can shear the llamas in 30 minutes. Darnell is somewhat slow; it takes him 5 hours to shear the llamas. Eleanor earns $160 per hour as a psychiatrist, while Darnell earns $25 per hour as a cobbler. Keeping in mind that either Eleanor or Darnell must take time off from work to shear the llamas, who has the lower opportunity cost of completing the task?

Answer 1

Answer:

Eleanor has the lowest opportunity cost of completing the task. Opportunity cost of $80.

Explanation:

opportunity cost calculations

Eleanor; she earns $160 per hour and can complete the task in 30 minutes therefore we convert the minutes to hours 30/60 = 0.5hours

$160 *0.5hours = $80

Darnell ; he earns $25 per hour and it will take him 5 hours to complete the task , his opportunity cost is $25 *5 =$125.