Question

Zoe is trying to decide how to divide her time between her job as a wedding photographer, which pays $22 per hour for as many hours as she chooses to work, and as a fossil collector, in which her pay depends on both the price of fossils and the number of fossils she finds. Earnings aside, Zoe is indifferent between the two tasks, and the number of fossils she can find depends on the number of hours a day she searches, as shown in the table below a. Using this information, compute the lowest price that Zoe would accept per fossil in order to justify her spending more time collecting fossils and less time working as a wedding photographer. Instructions: Complete the table below. Enter your responses rounded to two decimal places. Lowest price Zoe would accept per Total fossils Hours fossil per day per day 1 6 5.40 6.75 11 15 S 9.00 13.50 4 18 20 S 27 b. The relationship between the lowest price and the number of fossils collected is called the supply curve

Answer 1

(a)

Zoe works as wedding photographer and earns $22 per hour.

So, each hour Zoe spends on collecting fossils, she loses $22.

Thus,

The opportunity cost of 1 hour of fossil collection is $22.

Following is the required table -

Hours per day	Total fossils per day	Marginal product	Lowest price Zoe would accept per hour (Opportunity cost of 1 hour/marginal product)
1	6	6	(22/6) = $3.67
2	11	5	(22/5) = $4.40
3	15	4	(22/4) = $5.50
4	18	3	(22/3) = $7.33
5	20	2	(22/2) = $11

(b)

The relationship between the lowest price and the number of fossils collected is referred to as the Supply curve.