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krok68 [10]
3 years ago
7

Alexandra has determined that studying an hour for her economics quiz will improve her grade on the quiz from 75 to 100. She als

o 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.
Business
1 answer:
Aleksandr-060686 [28]3 years ago
7 0

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;

<em>Step 1: Determine the value of the study</em>

The value of study=$20

<em>Step 2: Determine the value of the wage</em>

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

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