Question

Ben and his housemates signed a lease for an apartment for 12 months for $563 per month of which Ben agreed to pay $215 per month. Which of the following statements best gives the reasons that Ben’s rent payment is an essential (fixed) expense? a. It cannot be eliminated in a later budget, in order to save money. b. Living expenses have a higher priority than any other type of expense. c. The spender controls the amount of the rent by choice of apartment. d. He agreed to pay the same amount every month.

Answer 1

Answer is D on E2020

Answer 2

Solution:

Cost of apartment(Ben + Housemates) = $ 563 per month

Amount paid by Ben per month = $ 215

Yes, Accommodation provided by someone for fixed amount is an essential Expense.

All the three statements regarding Ben who pays $ 215 per month are true.

a. It cannot be eliminated in a later budget, in order to save money.

b. Living expenses have a higher priority than any other type of expense.

c. The spender controls the amount of the rent by choice of apartment.