Scenario: Assume That There Are Five Apartments Located at Different

question 87

Multiple Choice

Scenario: Assume that there are five apartments located at different distances from an individual's place of work-very close, close, far, very far, and extremely far. The individual makes his choice by studying the change in costs as he moves farther from his place of work. He has to choose between renting one of the five apartments. The movement from apartment Very Close to Close has a marginal cost of −$60, a movement from apartment Close to Far has a marginal cost of −$40, a movement from apartment Far to Very Far has a marginal cost of −$10, and a movement from apartment Very Far to Extremely Far has a marginal cost of $20.
-Refer to the scenario above.Which of the following shifts will increase the total cost?

• A) A shift from apartment Close to apartment Far
• B) A shift from apartment Far to apartment Very Far
• C) A shift from apartment Very Close to apartment Close
• D) A shift from apartment Very Far to apartment Extremely Far

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Definitions:

Living Standards

The magnitude of economic riches, comfort levels, material acquisitions, and basic livable needs assigned to a particular social strata or region.

International Trade

The exchange of goods and services across national borders, influenced by comparative advantages, tariffs, quotas, and agreements.

Seller

An individual or entity that offers a product or service for sale.

Buyer

An individual or organization that purchases goods or services for personal use or for the purpose of resale.