Answer to Question #133360 in Microeconomics for Parisal

Question

An individual makes purchases once a week. If he buy in large hypermarkets, usually located far from the center, it turns out to be 20% cheaper than in the nearest store. However, there are additional costs for transport of 10$ and it takes 4 hours longer. An individual is moderately lazy, and saving less than 15$ will not force him to spend 4 hours of free time.
1) at what amount of expenses does an individual prefer the nearest store?
2) when the amount of expenses is more than 130$ per week, the individual still prefers to buy at the nearest store. What time does he now estimate his free time (per hour)?

Answer 1

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