Tanner,who Is Single,purchased a House on April 15,2002 for $215,000

question 26

Multiple Choice

Tanner,who is single,purchased a house on April 15,2002 for $215,000.During the time Tanner owned the house,he installed a swimming pool at a cost of $21,000 and replaced the deck at a cost of $18,000.On August 5,2016,Tanner sold the house for $570,000.Tanner paid a sales commission of $30,000 and legal fees of $800 connected with the sale of the house.What is Tanner's recognized gain on the sale of the house?

• A)$0.
• B)$250,000.
• C)$285,200.
• D)$35,200.

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Definitions:

Budget Line

A visual diagram showing every pairing of two items that a person can purchase within their budget constraints, based on their earning and the cost of these products.

Consumption Bundles

These are combinations of different goods and services that an individual consumes, representing a mix of choices according to their preferences and budget.

Income

Earnings received by individuals or entities, typically in the form of wages, salaries, rents, interest, or profits, available for spending or saving.

Substitution Effect

The shift in buying habits caused by a change in the relative costs of products, prompting consumers to substitute pricier options with more affordable ones.