Steven Lives in a Big City Where There Is a Shortage

question 22

Multiple Choice

Steven lives in a big city where there is a shortage of parking.He has a parking spot in his driveway where he parks his car.Which of the following statements is most correct?

• A) Steven has a lower opportunity cost of owning a car than does his neighbor, who must rent a parking spot.
• B) The opportunity cost of using the parking spot is zero, because Steven owns the house.
• C) The opportunity cost of using the parking spot is the price he could charge someone else for using the spot.
• D) The opportunity cost depends on how much Steven's mortgage payment is.

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Definitions:

Net Proceeds

The amount of money remaining after all deductions, like expenses and taxes, are subtracted from the gross proceeds.

Weekly Salary

The total amount of money earned by an employee for work performed in a week.

Commission

A fee paid for services, usually a percentage of the total cost, to a person or company for conducting a transaction or service.

Dealer Price

The amount a dealer pays for a product or vehicle, which usually excludes any additional fees or markups before selling it to the end consumer.