Question :
Ryan wants to rent an apartment. The following table shows : 1377309
Ryan wants to rent an apartment. The following table shows the monthly rent of five apartments and the monthly commuting time to work from each apartment. Ryan’s opportunity cost of time is $15 per hour.
Apartment
Commuting Time (hours/month)
Rent ($/month)
1
40
1,500
2
20
1,750
3
10
2,000
4
4
2,210
5
1
2,250
11) Refer to the table above. The total cost per month is the highest if Apartment ________ is rented.
A) 2
B) 3
C) 4
D) 5
12) Refer to the table above. The total cost per month is the lowest if Ryan chooses to rent Apartment ________.
A) 1
B) 2
C) 3
D) 4
13) Refer to the table 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
14) Refer to the table above. If the opportunity cost of time increases to $60 per hour, renting which apartment will turn out to be the most expensive every month?
A) 1
B) 2
C) 3
D) 4
15) The analysis of economic outcomes before and after some economic variable is changed is referred to as:
A) Pareto analysis.
B) marginal study.
C) cardinal research.
D) comparative statics.
16) Which of the following statements is true?
A) Marginal analysis is a key tool used while optimizing in levels.
B) Comparative statics is a tool that can be used in both optimization in levels and optimization in differences.
C) Marginal analysis is the comparison of economic outcomes before and after some economic variable is changed.
D) Comparative statics involves calculating the incremental cost of moving from one alternative to the next best alternative.
17) The analysis of how a customer’s tastes for cars will change when his wealth triples is under the scope of:
A) ordinal study.
B) marginal research.
C) Pareto analysis.
D) comparative statics.
18) Which of the following is an example of comparative statics?
A) The estimation of the quantity demanded of a good when its price is $5.
B) The estimation of the demand for a particular good when consumer income is $10.
C) The estimation of the ideal number of workers a firm should hire, when wage rate is $20 per hour.
D) The estimation of the supply of a good when the wage rate of labor changes from $30 to $10 per hour.
19) An individual rents an apartment for $200 per month. His monthly opportunity cost of commuting to work from this apartment is $50. After a year, he moves to an apartment closer to his place of work, but pays $250 as rent. Compared to the initial situation, after a year:
A) his direct cost of renting the apartment increases, while the indirect cost of renting the apartment remains unchanged.
B) his direct cost of renting the apartment increases, while the indirect cost of renting the apartment decreases.
C) his direct cost of renting the apartment remains the same, while the indirect cost of renting the apartment decreases.
D) his direct cost of renting the apartment remains the same, while the indirect cost of renting the apartment increases.
The following graph shows an individual’s total cost of renting four apartments located at different distances from her place of work.
20) Refer to the figure above. Which apartment is the best feasible choice for the individual?
A) Apartment 1
B) Apartment 2
C) Apartment 3
D) Apartment 4
21) Refer to the figure above. Other things remaining the same, assume that the individual now has a higher opportunity cost of time. Which of the following statements is true in this context?
A) The cost curve will move up.
B) The cost curve will move down.
C) Optimization in levels will not lead to an efficient outcome.
D) Optimization in differences will not lead to an efficient outcome.
