Asked by Sarah
Lisa needs to buy a textbook for the next economics class. The price at the bookstore is $65. One online site offers the same book for $55 and another site for $57. All prices include sales tax. The following table indicates the typical shipping and handling charges for the textbook ordered online.
Delivery time = 3-7 days, S&H = $3.99
Delivery time = 2 business days, S&H = $8.98
Delivery time = 1 business day, S&H = $13.98
a. What is the opportunity cost of buying online?
b. Show all relevant choices for this student.
c. What determines which of these options the student will choose?
Delivery time = 3-7 days, S&H = $3.99
Delivery time = 2 business days, S&H = $8.98
Delivery time = 1 business day, S&H = $13.98
a. What is the opportunity cost of buying online?
b. Show all relevant choices for this student.
c. What determines which of these options the student will choose?
Answers
Answered by
economyst
Take a shot, what do you think.
Hint: first eliminate the clear loser options. The $57 purchase is a clear loser as one can make an online purchase for $55. The 1-day delivery is also a clear loser. The opportunity cost of getting the book for $58.99 instead of 65 is the possible 7-day wait. Take it from here.
Hint: first eliminate the clear loser options. The $57 purchase is a clear loser as one can make an online purchase for $55. The 1-day delivery is also a clear loser. The opportunity cost of getting the book for $58.99 instead of 65 is the possible 7-day wait. Take it from here.
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