Terese and Patrick need to decide which one of them will take time off work to complete the rather urgent task of shearing llamas. Terese is pretty good with a pair of shears, she can shear the llamas in 30minutes. Patrick is somewhat slow, it takes him 5hours to shear the llamas. Terese earns 160per hour as a personal trainer, while Patrick earns 20per hour as a clerk.

Keeping in mind that either Terese or Patrick must take time off from work to shear the llamas, who has the lowest opportunity cost?

A) Terese
B) Tersese and Patrick face identical opportunity cost
c) Patrick

One's opportunity cost is the amount of income one forfeits in order to choose some "alternative"--which in this case is the choice to shear the llamas.

How much income does Terese give up if she chooses to take time off work to do the shearing work? How about Patrick?

Quote:

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Originally Posted by ArcSine

One's opportunity cost is the amount of income one forfeits in order to choose some "alternative"--which in this case is the choice to shear the llamas.

How much income does Terese give up if she chooses to take time off work to do the shearing work? How about Patrick?

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It doesn't say, I guess I would have to use the 20 per hour and the 160per hour

It does say... it just doesn't say it directly. If Terese gets 160 per hour at her job, and it would take her a half hour to shear the llamas, how much income would she be giving up in order to do the shearing?