Question

The house that jeanne inherited from her mother can rent for $1500/month, but jeanne decides to allow her brother to stay there for only $500 per month. this decision carried with it a

Answer 1

This decision is carried with a $500 per month monetary cost and a $1,000 per month opportunity cost. An opportunity cost describes what you give up/loss of something if you go with a different alternative. Jeanne has the opportunity to rent the house out for $1,500 but decides to rent it for $500 so she’s giving up $1,000 when renting it at a lower price. Jeanne will receive the monetary amount of $500.

Answer 2

The answer to the question above is "$500 per month monetary cost but a $1500 per month opportunity cost" based on the situation shown in the question above. The monetary cost is the certain amount which Jeanne will receive. The opportunity cost is the return which Jeanne could receive if she did not rent the house to his brother.