If the marginal rent cost of moving from Apartment 1 to Apartment 2 is -$60, and marginal commuting cost of moving from Apartment 1 to Apartment 2 is $40:
A) moving from Apartment 1 to 2 will save the renter $60 more in rent and $40 more in commuting.
B) moving from Apartment 1 to 2 will cost the renter $60 more in rent but save $40 in commuting.
C) moving from Apartment 1 to 2 will cost the renter $60 more in rent and $40 more in commuting.
D) moving from Apartment 1 to 2 will save the renter $60 in rent but cost $40 more in commuting.
Assume that a firm wants to set up a factory. It has four different options. The rent of the factory in the four different locations and the time taken to transport the product from each location to the market is shown in the table below. The opportunity cost of time is $10 per hour.
Factory Location Monthly Commuting Time (hours) Monthly Rent ($)
Very Far 30 2,060
Far 25 2,100
Close 15 2,300
Very Close 5 2,500
D
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A tradeoff is
A) represented by a point inside a PPF. B) represented by a point outside a PPF. C) a constraint that requires giving up one thing to get another. D) a transaction at a price either above or below the equilibrium price.
Which one of the following factors will most likely cause an increase in aggregate demand?
a. An increase in net exports. b. An increase in the real interest rate. c. A decrease in net exports due to falling incomes abroad. d. A technological development that decreases the cost of producing computer chips.
When actual output is less than potential output there is a(n):
A. trade deficit. B. budget deficit. C. recessionary gap. D. budget surplus.
The income elasticity of demand for jewelry is 2. Other things equal, a 10 percent increase in consumer income will:
A. decrease the quantity of jewelry purchased by 20 percent. B. increase the quantity of jewelry purchased by 20 percent. C. decrease the quantity of jewelry purchased by 10 percent. D. increase the quantity of jewelry purchased by 10 percent.