Michelle Purchased Her Home for $150,000,and Subsequently Added a Garage

question 87

Multiple Choice

Michelle purchased her home for $150,000,and subsequently added a garage costing $25,000 and a new porch costing $5,000.Repairs to the home's plumbing cost $1,000.The adjusted basis in the home is

• A)$150,000.
• B)$151,000.
• C)$180,000.
• D)$181,000.

Understand the concept of equity and how it can be built in home ownership.

Comprehend the importance of location, appraisal, and negotiations in real estate transactions.

Recognize the legal and financial responsibilities of home ownership.

Understand the financial protections and obligations in renting scenarios.

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Definitions:

Equilibrium

A state in a market where supply equals demand, with no external forces causing disruption, hence prices tend to stabilize.

Labor Supply

The cumulative hours that workforce members are eager and able to dedicate to work, provided a set wage.

Marginal Productivity

The additional output resulting from the use of one more unit of a production factor.

Wages

Payments made to labor for their services, typically expressed per hour or per annum.