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.The total cost per month is the highest if Apartment ________ is rented.
A) 2
B) 3
C) 4
D) 5

Question

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.The total cost per month is the highest if Apartment ________ is rented.
A) 2 
B) 3 
C) 4 
D) 5

Quizplus · Accepted Answer

To calculate the total cost per month, we need to add the monthly rent to the opportunity cost of time spent commuting. The total cost per month for each apartment is as follows:
Apartment 1: $1,500 + (25 * $15) = $1,875
Apartment 2: $1,200 + (20 * $15) = $1,500
Apartment 3: $1,800 + (5 * $15) = $1,875
Apartment 4: $2,000 + (10 * $15) = $2,250
Apartment 5: $1,000 + (15 * $15) = $1,250

Therefore, the total cost per month is the highest for Apartment 4, with a total cost of $2,250 per month.

Scenario: Ryan Wants to Rent an Apartment