Kate Is a Personal Trainer Whose Client William Pays $80

question 134

Multiple Choice

Kate is a personal trainer whose client William pays $80 per hour-long session. William values this service at $100 per hour, while the opportunity cost of Kate's time is $75 per hour. The government places a tax of $10 per hour on personal trainers. After the tax, what is likely to happen in the market for personal training?

• A)Kate and William will agree to a new price somewhere between $85 and $100.
• B)Kate and William will agree to a new price somewhere between $70 and $110.
• C)Kate will no longer offer personal training services to William because she must charge more than $100 in order to cover her opportunity costs and pay the tax.
• D)The price will remain at $80, and Kate will pay the $10 tax.

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Definitions:

HR Plans

Strategic outlines developed by the human resources department of an organization to manage and support its workforce in alignment with its overall goals.

Outsourcing

The business practice of hiring a party outside a company to perform services and create goods that traditionally were performed in-house by the company's own employees and staff.

Incremental Change

Gradual adjustments or improvements made over time to processes, strategies, or products, rather than major transformations or innovations.

Annual Operating Expenses

The total costs associated with running a business, organization, or project within a given fiscal year, excluding the cost of goods sold.