Juanita earns an hourly wage of $32 at her job. In order to purchase her sneakers she will have to take time off work, so each hour away from her job
costs her $32 in lost income. Assume that Juanita's travel time is the same each way (to and from the store) and that it will take her 30 minutes once
she reaches a store to complete her shopping. Assume throughout the question that Juanita incurs no additional costs other than the sneakers, such
as gas.
Opportunity Cost of Time
(Dollars)
Price of a Sneakers
(Dollars per sneakers)
126
Store
Local Shoe Store
Different Neighborhood in Town
Rural Outlet
103
83
Total Cost
(Dollars)
Assume that Juanita considers both her opportunity costs and the price of sneakers when making her shopping decision. Juanita will minimize her cost
of buying the sneakers if she shops at the