John Is Trying to Decide How to Divide His Time

question 90

Multiple Choice

John is trying to decide how to divide his time between his job as a stocker in the local grocery store, which pays $7 per hour for as many hours as he chooses to work, and cleaning windows for the businesses downtown. He makes $2 for every window he cleans. John is indifferent between the two tasks, and the number of windows he can clean depends on how many hours he spends cleaning in a day, as shown in the table below: $$\begin{array} { | c | c | } \hline \begin{array} { c } \text { Hours Per } \\\text { Day Cleaning } \\\text { Windows }\end{array} & \begin{array} { c } \text { Total Number } \\\text { of Windows } \\\text { Cleaned }\end{array} \\\hline 0 & 0 \\\hline 1 & 7 \\\hline 2 & 11 \\\hline 3 & 14 \\\hline 4 & 16 \\\hline 5 & 17 \\\hline\end{array}$$ Should John spend a third hour cleaning windows?

• A)Yes, because he would earn $28.
• B)Yes, because the additional amount he would earn is $14, which is greater than his opportunity cost of $7.
• C)No, because the additional amount he would earn is $6, which is less than his opportunity cost of $7.
• D)Yes, because the additional amount he would earn is $6, which is better than earning nothing.

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Definitions:

Medicare Expenditures

The total amount of money spent by the government on Medicare, which is a federal program providing health insurance to people over 65 and certain younger individuals with disabilities.

Medicare

A federal health insurance program in the United States providing healthcare coverage to people who are 65 or older, as well as to younger individuals with specific disabilities.

Prescription Drugs

Prescription drugs are medications legally prescribed by a healthcare professional to treat specific medical conditions.

Market Forces

The economic factors affecting the supply and demand of goods and services in a market, determining prices and quantities.