Answered: Suppose that Ciana is deciding whether…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 1SCQ: Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can...

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Suppose that Ciana is deciding whether or not to buy a pair of sneakers that she has been researching online, and also the best place to make her purchase. Three different stores in the area sell the sneakers she likes, but some stores are more convenient for Ciana to reach than others. One option is her local shoe store located only 15 minutes away from where she works, where they charge a marked-up price of $124 for the sneakers:

Store	Travel Time Each Way	Price of a Sneakers
(Minutes)	(Dollars per sneakers)
Local Shoe Store	15	124
Different Neighborhood in Town	30	103
Rural Outlet	60	70

Ciana earns an hourly wage of $30 at her job. In order to purchase her sneakers she will have to take time off work, so each hour away from her job costs her $30 in lost income. Assume that Ciana’s travel time is the same each way (to and from the store) and that it will take her 30 minutes once she reaches a store to complete her shopping. Assume throughout the question that Ciana incurs no additional costs other than the sneakers, such as gas.

Complete the following table by computing the opportunity cost of Ciana's time and the total cost of shopping at each location.

Store	Opportunity Cost of Time	Price of a Sneakers
(Dollars)	(Dollars per sneakers)	(Dollars)
Local Shoe Store		124
Different Neighborhood in Town		103
Rural Outlet		70

Assume that Ciana considers both her opportunity costs and the price of sneakers when making her shopping decision. Ciana will minimize her cost of buying the sneakers if she shops at the__________.

Suppose that Ciana is deciding whether or not to buy a pair
of sneakers that she has been researching online, and also
the best place to make her purchase. Three different stores
in the area sell the sneakers she likes, but some stores are
more convenient for Ciana to reach than others. One option
is her local shoe store located only 15 minutes away from
where she works, where they charge a marked-up price of
$124 for the sneakers:
Store
Local Shoe Store
Different Neighborhood in Town
Rural Outlet
Travel Time Each Way
(Minutes)
15
30
60
Store
Local Shoe Store
Marked-up
price
Different Neighborhood in Town
Rural Outlet
Juanita's office
Price of a Sneakers
(Dollars per sneakers)
124
103
70
Ciana earns an hourly wage of $30 at her job. In order to purchase her sneakers she will have to take time off work, so each hour away from her job
costs her $30 in lost income. Assume that Ciana's travel time is the same each way (to and from the store) and that it will take her 30 minutes once
she reaches a store to complete her shopping. Assume throughout the question that Ciana incurs no additional costs other than the sneakers, such as
gas.
Discounted
price
Complete the following table by computing the opportunity cost of Ciana's time and the total cost of shopping at each location.
Opportunity Cost of Time
(Dollars)
Price of a Sneakers
(Dollars per sneakers)
124
Original price
103
70
Total Cost
(Dollars)
Assume that Ciana considers both her opportunity costs and the price of sneakers when making her shopping decision. Ciana will minimize her cost of
buying the sneakers if she shops at the

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