Question

Excr 1 01 Jane is deciding whether to go to school for 8 weeks this summer. The cost of tuition and textbooks is $1,700 and housing and other expenses will cost her $600. If she does not go to school, she will live in her parents' house for free and they will cover her food and other expenses for her. A to summer school she could work fulltime. But the best job she can get pays only $600 per week, and J would only agree to give up her free time for no less than $750 per week. However, if school, she'll have to spend 40 hours a week attending classes and studying. a) What will the summer school cost Jane in terms of money spent? b) Wh lso, if Jane does not go ane she goes to summer at are the opportunity costs of going to summer school that Jane does not pay explicitly? Explain. c) What is Jane's total opportunity cost of going to school this summer? Explain your answer. Suppose that if Jane does not go to summer school, she will eventually take the classes anyway. What is Jane's marginal benefit of going to summer school? e) Suppose Jane decides to go to school in the summer. Explain her decision using the concepts of marginal cost and marginal benefit.

Answer 1

A) Cost of summer school(accounting/express costs)= Lodging and other expenses+ Educational cost fee= $1700+$600=$2300

B) The activity she could have done for example the cash that could have been made working as opposed to going to class and the esteem she puts on her spare time which is $750

C) Jane's complete open door cost of going to class this late spring will be $600*8=$4800. The following best elective she is getting as opposed to going to a late spring school for about two months is $600. So she is prior $600 for about two months totalling upto $4800.

D) Jane's minor advantage of going to summer school ought to be at any rate $150 every week, that is the measure of contrast in the open door cost($600) and what she esteems her time($750)

E) All out cost(implicit+explicit)= $2300+$4800=$7100

Minor expense per week=$7100/7=$1014.28

All out benefit(explicit+implicit)= Saving money on other expenses($600)+value of extra time on studying($750*8)=$6600

Minimal advantage per week=$6600/942.85

MC>MB. Consequently, she won't go to summer school.