Juanita makes $30 an hour at work. She has to take time off work to purchase her suit, so each hour away from work costs her $30 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling. Assume that it takes 15 minutes to travel to the local department store, 30 minutes to travel to the store across town, and 60 minutes to travel to the store in the neighboring city.

Complete the following table by computing the opportunity cost of Juanita's time and the total cost of shopping at each location.

Store Opportunity Cost of Time (Dollars) Price of a Suit (Dollars per suit) Total Cost (Dollars)
Local Department Store 114
Across Town 86
Neighboring City 60

Across Town

Explanation:

Missing word "Assume that Juanita takes opportunity costs and the price of the suit into considerate when she shops. Juanita will minimize the cost of the suit if she buys it from the               "

Local Department Store

15 min + 15 min + 30 min = 1 hour

Opportunity cost of time = 1 hour * $30 = $30

Total cost = $30 + $114 = $144

Across Town

30 min + 30 min + 30 min = 1.5 hours

Opportunity cost of time = 1.5 hours*$30 = $45

Total cost = $45 + $66 = $131

Neighboring City

6 min + 60 min + 30 min = 2.5 hours

Opportunity cost of time = 2.5 hours*$30 = $75

Total cost = $75 + $60 = $135

Assume that Juanita takes opportunity costs and the price of the suit into considerate when she shops. Juanita will minimize the cost of the suit if she buys it from the Across Town.

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