Multiple Select QuestionSelect all that applyThe opportunity costs and common trade-offs of a housing decision include which of the following?Multiple select question.interest lost on money used for down paymentcost to commute to work when you live in area that offers less expensive housingcost of food to fill the refrigerator of the new homethe cost of utilities in the new homethe loss of tax advantages
Question
Multiple Select QuestionSelect all that applyThe opportunity costs and common trade-offs of a housing decision include which of the following?Multiple select question.interest lost on money used for down paymentcost to commute to work when you live in area that offers less expensive housingcost of food to fill the refrigerator of the new homethe cost of utilities in the new homethe loss of tax advantages
Solution
The opportunity costs and common trade-offs of a housing decision include:
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Interest lost on money used for down payment: This is an opportunity cost because the money used for the down payment could have been invested elsewhere to earn interest.
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Cost to commute to work when you live in an area that offers less expensive housing: This is a trade-off because while you may save money on housing, you may end up spending more on transportation.
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The cost of utilities in the new home: This is a cost that needs to be considered when making a housing decision. It can significantly add to the monthly expenses.
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The loss of tax advantages: If you were previously benefiting from certain tax advantages that you will no longer have in your new home, this is an opportunity cost.
The cost of food to fill the refrigerator of the new home is not typically considered an opportunity cost or trade-off of a housing decision, as this is a cost you would likely have regardless of where you live.
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