Soo Jin shares a one-bedroom apartment with her classmate. Her share of the rent is $700 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 ...

1) Soo Jin did not have a choice; her roommate was a slob.

2) Soo Jin figures that the additional benefit of having her own place (as opposed to sharing) is at least $250.

3) Soo Jin figures that the benefit of having her own place (as opposed to sharing) is at least $950.

4) The cost of having one's own space outweighs the benefits.

Question

Jordan Sanders

Business

12 April, 04:12

Soo Jin shares a one-bedroom apartment with her classmate. Her share of the rent is $700 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 ...

1) Soo Jin did not have a choice; her roommate was a slob.

2) Soo Jin figures that the additional benefit of having her own place (as opposed to sharing) is at least $250.

3) Soo Jin figures that the benefit of having her own place (as opposed to sharing) is at least $950.

4) The cost of having one's own space outweighs the benefits.

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Answers (1)

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Thalia Brandt · Answer 1

2) Soo Jin figures that the additional benefit of having her own place (as opposed to sharing) is at least $250.

Explanation:

The cost of Soo Jin moving into the studio apartment = $950 - $700 = $250.

Since you believe that she is a rational person, as everyone should be, then the only possible conclusion is that the benefits that she obtains from living by herself offset the costs of doing so.