Question

Suppose that you could either prepare your own tax return in 15 hours, or hire a tax specialist to prepare it for you in 2 hours. You value your time at $11.00 an hour; the tax specialist will charge you $55 an hour. The opportunity cost of preparing your own tax return is: Group of answer choices

Answer 1

Answer:

$165

Explanation:

According to scenario, computation of data are as follows,

Time required to file on own = 15 hours

Value of own time = $11 per hour

Time required to file by an expert = 2 hours

Tax specialist charges = $55 per hour

So, opportunity cost of preparing own tax =  Time required to file on own × Value of own time

By putting vale, we get

Opportunity cost = $11 × 15

= $165