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Debra is thinking about going to Disneyland with her friend
Debra is thinking about going to Disneyland with her friend. Debra is willing to pay HK$X to go to Disneyland. A ticket to Disneyland costs HK$483 and she will have to cancel her part-time job that pays HK$444. Normally, she would be unwilling to do the part-time job for less than HK$286. (Debra views the unpleasantness of the part-time job as an offset against her salary.) Debra will decide to go to Disneyland if and only if X is larger than or equal to [Answer] dollars.
Expert Solution
Answer:
Debra will decide to go to Disneyland if and only if X is larger than or equal to 641 dollars
Step-by-step explanation
ticket to Disneyland = HK$483
part-time job = HK$444
unwilling if the part time job pays = HK$286
The amount Debra is willing to pay for Disneyland = Cost of ticket + The income lost from the part time income (opportunity cost)
The amount Debra is willing to pay for Disneyland = 483 + ( 444 - 286 )
The amount Debra is willing to pay for Disneyland = 641
Debra will decide to go to Disneyland if and only if X is larger than or equal to 641 dollars
*( 444 - 286 ) --> This is the opportunity cost of the work that she is engaged in and the minimum income that she will work. Any wage below 286 will not be included since she will not work at lower salary. Any amount between 444 and 286 will be her opportunity.
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