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An Individual Rents an Apartment for $200 Per Month

Question 1

Multiple Choice

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 a rent of $250. Compared to the initial situation, after a year, his direct cost of renting the apartment________


A) increases, while the indirect cost of renting the apartment remains unchanged
B) increases, while the indirect cost of renting the apartment decreases
C) remains the same, while the indirect cost of renting the apartment decreases
D) remains the same, while the indirect cost of renting the apartment increases

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