Question

You are a professor of economics at a university.​ You've been offered the position of serving as department​ head, which comes with an annual salary that is ​$9.500 higher than your current salary.​ However, the position will require you to work 200 additional hours per year. Suppose the next best use of your time is spending it with your​ family, which has value of ​$20 per hour. What is the difference in the net benefit from becoming the department​ head?

Answer 1

Answer:

$          27.50           per hour

$    5,500.00           per year

Explanation:

                                                $  

Salary upgrade:                  9,500.00   annual

Additional Working Hours :     200.00         yearly

Family hours value:               20.00   hourly

 

 

Additional Working Hours: Value determination:  

 

        Salary upgrade     =

 Additional Working Hours    

 

9.500 / 200 =  47.50  

 

Additional hours value:  $ 47.50  

 

Net Benefit determination  

 

  Additional Working hours value - Family Hours value  =  

 

  47.50 - 20.00  = 27.50  

 

$          27.50    per hour

$    5,500.00          per year   ( 27.50 * 200 hours )