Question

To complete his business bookkeeping work each month, a business owner spends about 20 hours and in the process, has to give up $900 in income. If he hired a bookkeeper to do the work, the job would be completed in 15 hours and would cost him $600. Should the owner hire the bookkeeper or continue to do the work himself?

Answer 1

Answer:

We need to determine the opportunity cost. In this case, there is no question that the books should be delegated to the bookkeeper. Not only he saves money ($300), he saves time that could be put to better use.

Explanation:

Giving the following information:

Owner= $900 and 20 hours

Bookkeeper= $600 and 15 hours

We need to determine the opportunity cost. In this case, there is no question that the books should be delegated to the bookkeeper. Not only he saves money ($300), he saves time that could be put to better use.