Asked by Deneatra Caesar on Jul 15, 2024
Verified
A popular celebrity that is paid highly for her time should probably not mow her own lawn because
A) her opportunity cost of mowing her lawn is higher than the cost of paying someone to mow it for her.
B) she has a comparative advantage in mowing her lawn relative to a landscaping service.
C) she has an absolute advantage in mowing her lawn relative to a landscaping service.
D) she might sprain her ankle.
Opportunity Cost
Opportunity cost is the value of the next best alternative forgone as the result of making a decision.
Comparative Advantage
The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than its competitors.
Absolute Advantage
The ability of an entity to produce more of a good or service than competitors using the same amount of resources.
- Appreciate the role of opportunity costs in individual decision-making regarding resource allocation.
Verified Answer
SS
Shaquanda SmithJul 19, 2024
Final Answer :
A
Explanation :
The opportunity cost for a highly paid celebrity to mow their own lawn is the income they could have earned during that time doing their professional work, which is likely much higher than the cost of hiring someone to mow the lawn for them.
Learning Objectives
- Appreciate the role of opportunity costs in individual decision-making regarding resource allocation.