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Business, 18.08.2021 01:50 uticabadgirl

Andrew calculated his food costs to be nearly $40 per week, of which half was spent on fully prepared foods at restaurants, etc., and another quarter on prepared foods eaten at home. As he considered this, he thought, that he was spending a lot of his money paying other people to prepare his food. But then he thought about the value of his time, the so-called "implicit cost" that he's saving by not preparing his own food. He can make $10 an hour mowing lawns and a Taco Bell meal costs him only $4.00. Since it would take him an hour to prepare that meal at home (e. g., chopping vegetables, frying meat, etc.) himself, isn't he saving $6.00 plus the cost of the ingredients by working and paying someone else to prepare his meal? Once he thought about the fact that he was also a lousy cook, he would really prefer to mow another lawn than have to spend an hour cooking and having to eat what he cooked. Andrew is home one winter day studying for an exam. It is lunchtime and he is hungry. Instead of making a sandwich from roast beef in the fridge, he drives to Taco Bell and spends $4 for 2 tacos, a burrito and a Dr. Pepper. He reasons that he can make $10 per hour cutting lawns so he really saves $6 by going to Taco Bell rather than preparing his own meal. What's wrong with Andrew's argument?

A. The time he spends preparing his own meal has no value.
B. He might enjoy the food better at Taco Bell.
C. Given the time of year, he probably can't sell this hour, on the spot, for $10.
D. He couldn't study if he stayed at home.

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Andrew calculated his food costs to be nearly $40 per week, of which half was spent on fully prepare...

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