Microeconomics: Principles, Applications, and Tools (8th Edition)

Published by Prentice Hall
ISBN 10: 0-13294-886-9
ISBN 13: 978-0-13294-886-9

Chapter 2 - The Key Principles of Economics - Exercises - 2.1 The Principle of Opportunity Cost - Page 43: 1.4

Answer

\$22,000

Work Step by Step

The cost of living in the house includes not only the utilities and taxes, but the opportunity cost of not earning the interest on money that could be obtained by selling the house. $c=1000+3000+(300000\times0.06)=4000+18000=22000$
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