Darren is searching for a new job in Brisbane. He pays a $150 fee to join a job website called "Jobs in Brisbane" where he will conduct his search. He is currently employed and is paid $50,000 annually but would like a job that pays more. Darren values his free time the same as his hourly rate which is $30/hour. Which of the following statements is true? Darren should search until he knows all the available jobs in Brisbane. The opportunity cost of Darren searching for a new job is $50,000. Within the first three hours of searching Darren doesn't find a job and so he should give up and return to his current one. Darren should search until the value of his searching reaches thirty dollars an hour. Darren should factor in the $150 fee he has already paid to use the website.
Question
Darren is searching for a new job in Brisbane. He pays a 50,000 annually but would like a job that pays more. Darren values his free time the same as his hourly rate which is $30/hour.
Which of the following statements is true?
Darren should search until he knows all the available jobs in Brisbane.
The opportunity cost of Darren searching for a new job is $50,000.
Within the first three hours of searching Darren doesn't find a job and so he should give up and return to his current one.
Darren should search until the value of his searching reaches thirty dollars an hour.
Darren should factor in the $150 fee he has already paid to use the website.
Solution
The correct statement is: "Darren should factor in the $150 fee he has already paid to use the website."
Explanation:
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"Darren should search until he knows all the available jobs in Brisbane." - This is not necessarily true. Darren should search until he finds a job that meets his requirements, not necessarily until he knows all the available jobs.
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"The opportunity cost of Darren searching for a new job is 30/hour, not his current salary.
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"Within the first three hours of searching Darren doesn't find a job and so he should give up and return to his current one." - This is not necessarily true. The decision to give up or continue searching should be based on the potential benefits of finding a new job versus the cost of searching, not just on the results of the first few hours of searching.
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"Darren should search until the value of his searching reaches thirty dollars an hour." - This is not necessarily true. The value of Darren's searching is not just based on his hourly rate, but also on the potential benefits of finding a new job.
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"Darren should factor in the 150 fee is a sunk cost that Darren has already incurred, and it should be factored into his decision-making process.
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