Suppose Anna is considering two job offers. She can choose to either work as a barista in a cafe or a coach in a gym. The cafe is only a six-minute walk from where she lives. The gym is 40 minutes away by bus (single trip) with a daily ticket price of $4. The cafe offers her 4 shift hours per day, five days per week and pays her $20 per hour. While working at the cafe Anna can also have three cups of free coffee each week. Alternatively, the gym offers her 5 shift hours per day, three days per week and pays her $30 per hour and she can enjoy 20% discount off the gym membership. If Anna will take one and only one of the jobs, the opportunity cost of taking the coach job is $_______, ______ leisure time, plus _____.438, 0 hour, 20% discount off membership400, 0 hour, three cups of coffee438, +2 hours, 20% discount off membership438, +2 hour, three cups of coffee
Question
Suppose Anna is considering two job offers. She can choose to either work as a barista in a cafe or a coach in a gym. The cafe is only a six-minute walk from where she lives. The gym is 40 minutes away by bus (single trip) with a daily ticket price of 20 per hour. While working at the cafe Anna can also have three cups of free coffee each week. Alternatively, the gym offers her 5 shift hours per day, three days per week and pays her _______, ______ leisure time, plus _____.438, 0 hour, 20% discount off membership400, 0 hour, three cups of coffee438, +2 hours, 20% discount off membership438, +2 hour, three cups of coffee
Solution
To answer this question, we need to calculate the opportunity cost of taking the coach job, which is what Anna would give up if she chose the gym job over the cafe job.
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Calculate the total weekly earnings from each job:
Cafe: 400/week Gym: 450/week
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Calculate the cost of transportation to the gym:
12/week
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Subtract the transportation cost from the gym earnings:
12/week = $438/week
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Calculate the difference in leisure time:
Cafe: 5 days/week * 4 hours/day = 20 hours/week Gym: 3 days/week * 5 hours/day = 15 hours/week Difference: 20 hours/week - 15 hours/week = 5 hours/week
So, if Anna chooses the gym job, she would earn $38 more per week but would lose 5 hours of leisure time per week. She would also lose the three free cups of coffee per week from the cafe job.
Therefore, the opportunity cost of taking the coach job is $400, +5 hours of leisure time, plus three cups of coffee.
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