Suppose apartments are in four locations: Location A, Location B, Location C, and Location D. Location A is in the city, where your job is. Location B is 10 minutes farther from your job than Location A. Location C is 10 minutes farther from your job than Location B, and Location D is 10 minutes farther than Location C. In turn, similar apartments in Location B rent for $135 less per month than apartments in Location A, apartments in Location C rent for $135 less than in Location B, and apartments in Location D rent for $135 less than in Location C. Suppose the value of your time is $24 per hour and you work 21 days per month, with each day requiring a round-trip commute from your apartment to work.n

For simplicity, assume rent and the opportunity cost of your time commuting to work are the only factors influencing the location in which to rent an apartment.n

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You should rent an apartment in Location A Suppose you currently rent an apartment in Location B. By moving to optimize, you change your net benefit by S. ?? You should rent an apartment in Location A Suppose you currently rent an apartment in Location B. By moving to optimize, you change your net benefit by S. ??

Answer rating: 100% (QA)

Location Rent 595 A B C D 430 A 595 B 430 C 265 D 100 265 100 TimeBoth sides 02 0 0 7 14 21 102 20 ... View the full answer