The opportunity cost of an apartment in a rent-controlled market is equal to
A) the opportunity cost of searching for the apartment.
B) the rent charged for the apartment.
C) the rent charged for the apartment minus the opportunity cost of searching for the apartment.
D) the rent charged for the apartment plus the opportunity cost of searching for the apartment.
E) nothing, because of the surplus of apartments when there are rent controls.

Question

Quizplus · Accepted Answer

The opportunity cost of an apartment in a rent-controlled market includes both the rent charged for the apartment and the opportunity cost of searching for the apartment. This is because opportunity cost encompasses all costs associated with an action, including both explicit costs (like rent) and implicit costs (like time spent searching).

The Opportunity Cost of an Apartment in a Rent-Controlled Market