A construction crew (that is currently unemployed and receiving $10/hr. in benefits) to fix a road. The cement is purchased from a rip-off monopolist that charges $10/bag more than anyone else. The Follow-up maintenance will be done after 1 year, using a different crew that we will assume is not unemployed. We will also assume the interest rate is 7%. The cost estimate provided by the contractor’s accountant is given in the table below: ITEM Quantity Wage Price Total Labor 1,000 hours $20/hour $20,000 Cement 500 $50 $25,000 Follow up maint. 500 $20/hr $10,000 Project Total $55,000 The opportunity cost of the project is Group of answer choices $55,000 $41,000 $39,000 $33,000
A construction crew (that is currently unemployed and receiving $10/hr. in benefits) to fix a road. The cement is purchased from a rip-off monopolist that charges $10/bag more than anyone else. The Follow-up maintenance will be done after 1 year, using a different crew that we will assume is not unemployed. We will also assume the interest rate is 7%. The cost estimate provided by the contractor’s accountant is given in the table below: ITEM Quantity Wage Price Total Labor 1,000 hours $20/hour $20,000 Cement 500 $50 $25,000 Follow up maint. 500 $20/hr $10,000 Project Total $55,000 The opportunity cost of the project is Group of answer choices $55,000 $41,000 $39,000 $33,000
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter3: Benefits, Costs, And Decisions
Section: Chapter Questions
Problem 7MC
Related questions
Question
A construction crew (that is currently
ITEM |
Quantity |
Wage |
Price |
Total |
Labor |
1,000 hours |
$20/hour |
|
$20,000 |
Cement |
500 |
|
$50 |
$25,000 |
Follow up maint. |
500 |
$20/hr |
|
$10,000 |
Project Total |
|
|
|
$55,000 |
The
Group of answer choices
$55,000
$41,000
$39,000
$33,000
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