Question

Refer to Table 3.1. Suppose that you have a house that you rent out. If you keep the lawn maintained, you can charge a higher monthly rent for the house. Suppose your hourly wage from your job at the mall is $10, what is the net benefit of spending 12 hours per week maintaining the lawn of the house? Hours Per Week Maintaining Lawn Benefit (Additional Monthly Rent) $0.00 $150.00 $260.00 $330.00 $390.00 $450.00 Table 3.1 O $120 O $210 $320 O $330

Answer 1

Hourly usage rate = $10

Hours spent in maintaining the lawn = 12

Loss of income if lawn is maintained = Hourly usage rate x Hours spent in maintaining the lawn

= 10 x 12

= $120

Additional monthly rental income = $330

Net benefit of spending 12 hour per week maintaining lawn of house = Additional monthly rental income - Loss of income if lawn is maintained

= 330 - 120

= $210

Second option is the correct option

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