Question

Alexandra has determined that studying an hour for her economics quiz will improve her grade on the quiz from 75 to 100. She also determines that this improvement is worth $20. To study for an hour for her economics quiz, however, she will have to work one fewer hour at her part-time job. Alexandra should: study for the quiz as long as her hourly wage rate is less than $20. not study for the quiz because earning a higher grade cannot have a dollar value. study for the quiz only if her hourly wage rate is exactly $20. study for the quiz as long as her hourly wage rate is more than $20.

Answer 1

Answer:

Alexandra should: study for the quiz as long as her hourly wage rate is less than $20.

Explanation:

We need to determine if Alexandra's studies is worth the sacrifice at her job. This can be solved through the following steps;

Step 1: Determine the value of the study

The value of study=$20

Step 2: Determine the value of the wage

If she decides to sacrifice an hour of wages at her part-time job for $20 worth of study, then her opportunity cost should be at least zero for this decision to be worthwhile. This can be expressed as;

O=S-W

where;

O=opportunity cost

S=value of the study

W=value of 1 hour of work

In our case;

O=should be at least 0

S=$20

W=unknown=w

replacing;

0=20-w

w=$20

This means that she can study as long as her wage rate is less than $20, if the wage rate exceeds $20 then studying won't be worthwhile in terms of value