Scenario: Ryan Wants to Rent an Apartment

question 6

Multiple Choice

Scenario: Ryan wants to rent an apartment. The following table shows the monthly rent of five apartments and the number of hours per month it takes to commute to work from each apartment. Ryan's opportunity cost of time is $15 per hour.

-Refer to the scenario above.If the opportunity cost of time increases to $60 per hour,renting which apartment will minimize Ryan's total cost every month?

• A) 2
• B) 3
• C) 4
• D) 5

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Definitions:

Market Price

The price at which a good or service is offered in the marketplace.

Differentiated Products

Products that are distinguished from similar products by unique characteristics, branding, or quality, allowing companies to compete beyond price.

Perfectly Competitive

A descriptor of a market scenario where firms face many competitors, sell identical products, and have no control over the market price, leading to optimal efficiency and resource allocation.

Short Run

A time period in which at least one input, like plant size, is fixed and cannot be changed by the firm.