A Hotel Finds That If It Spends No Money on Renovations

question 46

Multiple Choice

A hotel finds that if it spends no money on renovations, they will be able to rent 135 rooms per night. However, they have found that for every $4000 spent on renovations, they will be able to rent an additional 30 rooms per night. Let x represent the amount of money spent on renovations and y represent the number of rooms rented. Determine a model for the number of rooms rented as a function of the amount of money spent on renovations.

• A) y = 135 + 30 x
• B) y = 135 + x
• C) y = 135 + x
• D) y = 135 + x
• E) y = 135 + 4000 x

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Definitions:

Budget Constraint

The limits imposed on household choices by income, wealth, and product prices.

Choice Set

The collection of all possible options available for selection by a decision-maker.

Leftover Income

The amount of income that remains after all necessary expenses, such as bills and living costs, have been paid.

Budget Constraint

A limit on the consumption bundles that a consumer can afford given their income and the prices of goods.