Answer to Question #270803 in Microeconomics for Anna

Question

Your place of employment offers the choice of working from home or working at the office. At times it can be difficult to find a parking place near the office. When this is the case, employees will make the decision to turn around and go home. Every Wednesday your employer offers a catered lunch from an exclusive restaurant to all employees working that day in their office. This means that on Wednesday’s you can expect the optimal amount of time employees are looking for a place to park will ______. This is because ________. 

A. decrease; the marginal cost of search is higher

B. increase; the marginal cost of search is lower

C. increase; the marginal benefit of search is higher

D. decrease; the marginal benefit of search is lower

 

Answer 1

C. increase; the marginal benefit of search is higher