Soo Jin shares a one-bedroom apartment with her classmate. Her share of the rent is $600 per month. She is considering moving to a studio apartment which she will not have to share with anyone. The studio apartment rents for $950 per month. Recently, you ran into Soo Jin on campus and she tells you that she has moved into the studio apartment. Soo Jin is as rational as any other person. As an economics major, you rightly conclude that:

Question

Quizplus · Accepted Answer

Soo Jin's decision to move to a studio apartment instead of sharing a one-bedroom apartment implies that she expects to gain some benefit from having her own space. The difference in rent between the two apartments is $350 ($950 - $600). This means that the additional benefit of having her own place must be at least $350 for her to make the move. Therefore, option B is the correct answer. Option C cannot be correct because it assumes that Soo Jin values having her own space more than the cost of rent, which may not necessarily be the case. Option D is also not correct because Soo Jin has already made the decision to move, indicating that the benefits of having her own space outweighed the costs for her. Option A is irrelevant to the situation and does not provide any explanation for Soo Jin's decision.

Soo Jin Shares a One-Bedroom Apartment with Her Classmate