Economics (MindTap Course List)
Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
Question
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Chapter 29.2, Problem 2ST
To determine

The pure economic rent.

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Nick's salary is pure economic rent. What does this statement imply about Nick's next best alternative salary?
You are choosing between buying a home or continuing to rent.You value the home at $1,000,000 (one million dollars) over the course of your life.The home will cost $600,000, which includes the $400,000 price tag for the house itself,$100,000 in mortgage interest payments, and $100,000 in repair costs.You value the apartment you'd live in at $800,000 over the course of your life, and it will cost$500,000 in rentWhat is the economic surplus of buying the house? Don't include commas or dollar signs inyour answer.
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