Transportation Economics Duwan runs a small convenient store. He has hired a per

Question

Transportation Economics Duwan runs a small convenient store. He has hired a person for $8 per hour, 8 hours per day, 7 days a week. He works in the store himself for 3 hours per day The utility cost $900 per month, the cost of buying and transporting the goods to his store is $2900 per month. The rent rate of the place is $2500 per month He also works at another place for 4 hours a day for S18 per hour. The minimum wage is SIO per hour a. What is his total monthly expenditure? b. What is his monthly opportunity

Explanation / Answer

Labor wage per month = hourly wage × hours per day × days in a week× no of weeks in a day = 8*8*7*4 =$1792 per month.

Utility cost =$900

Transportation cost $2900

Rent = $2500

Therefore total monthly expenditure= $ 8092.

He works for 4 hrs each

Day therefore 4×7×4 = 112 hrs where as wages earned is 18*112= $ 2016 in month.

Hence opportunity cost if he has worked for 8 hours a day 8*7*4=224 hours per month

Earning =18*224= $4072

Opportunity cost equals earning--cost...

4072-607

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