Suppose you have an offer of $200,000 to sell your house this year. The market r

Question

Suppose you have an offer of $200,000 to sell your house this year. The market rate of interest is 10%. You expect to be able to sell your house next year for $230,000. How does this relate to the theory of nonrenewable resource allocation over time as discussed in class?

a.It does not relate because the housing market is not natural

b.To make a selling decision we take into account the discounted present value and the expected selling price
c.Because houses are set in land it is expected that they behave like a natural resource
d.Houses can be renewed so this example does not relate
Suppose you have an offer of $200,000 to sell your house this year. The market rate of interest is 10%. You expect to be able to sell your house next year for $230,000. How does this relate to the theory of nonrenewable resource allocation over time as discussed in class?

a.It does not relate because the housing market is not natural

b.To make a selling decision we take into account the discounted present value and the expected selling price
c.Because houses are set in land it is expected that they behave like a natural resource
d.Houses can be renewed so this example does not relate
Suppose you have an offer of $200,000 to sell your house this year. The market rate of interest is 10%. You expect to be able to sell your house next year for $230,000. How does this relate to the theory of nonrenewable resource allocation over time as discussed in class?

a.It does not relate because the housing market is not natural

b.To make a selling decision we take into account the discounted present value and the expected selling price
c.Because houses are set in land it is expected that they behave like a natural resource
d.Houses can be renewed so this example does not relate

Explanation / Answer

Answer - Houses usually need bricks, cement, metal etc. to build and these things are made from minerals. Minerals are natural non renewable resources which means it cannot be reproduced in short time like trees.

So, answer is option C)

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