Some people choose to live close to the city center; others choose to live away from the city and take a longer commute to work every day. Does picking a location with a longer commute imply a failure to optimize?

What will be an ideal response?

People will choose where to live depending on the costs and benefits of each available alternative. For those who choose to live in an apartment away from the central business district, the net benefit of that apartment must be higher than the net benefit from other apartments. Since costs include the opportunity cost of time and the cost of commuting, the direct and indirect costs vary for different people. This does not mean that they are not optimizing; they have different preferences and face different costs. As a result, they make different decisions.