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Ana and Shen need to decide which one of them will need to take time off work to complete the rather urgent task of shearing their llamas. Ana is pretty good with a pair of shears; she can shear the llamas in one hour. Shen is somewhat slow; it takes him six hours to shear the llamas. Ana earns $120 per hour as a business consultant, while Shen earns $15 per hour as a lifeguard.
Keeping in mind that either Ana or Shen must take time off work to shear the llamas, who has the lowest opportunity cost of completing the task?
A. Ana
B. Shen
C. Ana and Shen face identical opportunity costs

Respuesta :

Answer:

B

Explanation:

We have to consider the opportunity cost of both parties

Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.

If Ana chooses to shear, she would be forgoing  an income $120

If Shen chooses to shear for 6 hours, she would be forgoing an income ($15 x 6) = 90

Shen has a lower opportunity cost and should shear

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