Kevin has a lot of free time and he decides to pick up a new hobby. He has two options—he can take art classes or can sign up for French cooking classes
He estimates that the art classes would cost him $70, and would provide him with a benefit of $100. On the other hand, the cooking classes would cost him $120, but provide him benefits worth $160. Use cost-benefit analysis to arrive at the optimum choice for Kevin.
Kevin's optimal choice would depend on the net benefits of both options.
Net benefit of taking up art classes = $100 - $70 = $30
Net benefit of taking up cooking classes = $160 - $120 = $40
Therefore, given the costs and benefits involved, Kevin should sign up for the French cooking classes rather than the art classes.
You might also like to view...
In a small economy, consumption spending is $6,000, government spending is $1,200, gross investment is $1,500, exports are $2,000, and imports are $1,000. What is gross domestic product?
A) $9,700 B) $9,800 C) $10,800 D) $11,700
Which of the following is an intermediate target?
A) M2 B) reserves C) unemployment rate D) inflation rate
The price elasticity of supply for the market-day supply curve of fish is
a. equal to zero b. equal to one c. less than one d. more than one e. less than zero
A decrease in the money supply will shift the aggregate __________ curve to the __________
A) supply; left B) supply; right C) demand; left D) demand; right