Katie is planning to sell her house, and she is considering making two upgrades to the house before listing it for sale. Replacing the carpeting will cost her $2,500 and replacing the roof will cost her $9,000 . Katie expects the new carpeting to increase the value of her house by $3,000 and the new roof to increase the value of her house by $7,000
a. She should make both improvements to her house.
b. She should replace the carpeting but not replace the roof.
c. She should replace the roof but not replace the carpeting.
d. She should not make either improvement to her house.
b
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If, in a competitive market, marginal benefit is greater than marginal cost
A) the quantity sold is less than the equilibrium quantity. B) the net benefit to consumers from participating in the market is greater than the net benefit to producers. C) the government must force producers to lower price in order to achieve economic efficiency. D) the quantity sold is greater than the equilibrium quantity.
Government purchases
a. are only weakly related to aggregate income b. include spending on goods and services plus transfer payments c. are inversely related to aggregate income d. are inversely related to the price level e. are inversely related to the interest rate