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 $15 per hour.ApartmentCommuting Time (hours per month)Rent ($ per month)1401,5002201,7503102,000442,210512,250Refer to the scenario above. What is the total cost incurred per month if Ryan rents Apartment 5?& The total cost per month is the lowest if Ryan chooses to rent Apartment ________.

Answered: total cost

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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.

Apartment	Commuting Time (hours per month)	Rent ($ per month)
1	40	1,500
2	20	1,750
3	10	2,000
4	4	2,210
5	1	2,250

Refer to the scenario above. What is the total cost incurred per month if Ryan rents Apartment 5?

& The total cost per month is the lowest if Ryan chooses to rent Apartment ________.

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The opportunity cost depicts the value or cost of next best alternative forgone. When one has to choose an opportunity, he has to let go another one, that cost of letting go another opportunity shows the opportunity cost.

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