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Answer to Question #71829 in Microeconomics for ben

Question #71829
Kevin has a lot of free time and he decides to pick up a new hobby. He has two options—he can take art classes or can sign up for French cooking classes. He estimates that the art classes would cost him $70, and would provide him with a benefit of $100. On the other hand, the cooking classes would cost him $120, but provide him benefits worth $160. Use cost-benefit analysis to arrive at the optimum choice for Kevin.
Expert's answer
Kevin's optimal choice would depend on the net benefits of both options.
Net benefit of taking up art classes = $100 - $70 = $30
Net benefit of taking up cooking classes = $160 - $120 = $40
Therefore, given the costs and benefits involved,
Kevin should sign up for the French cooking classes rather than the art classes.

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