You have rented an apartment for $1,000 per month, on a 12-month lease, and have just been offered a summer internship in Washington, D.C. with the President's Council of Economic Advisors (congratulations!). Your rent is $1,000 per month. You want to sublet your apartment and put an ad on Craigslist. Only one response is received; someone attending summer school at your university offers you $500 per month. Using marginal analysis, you will

Question

Quizplus · Accepted Answer

Marginal analysis involves comparing the benefit of an incremental increase in an activity (in this case, subletting) to the cost of that increment. In this situation, the benefit of subletting the apartment for $500 is greater than the cost of not subletting at all (which would result in paying the full $1,000 per month without any rental income). Therefore, option B is the best choice. It is important to note that subletting should only be done if it is allowed in the lease agreement and with the landlord's permission.

You Have Rented an Apartment for $1,000 Per Month, on a 12-Month