Article Summary RealtyTrac,a Provider of Housing Data and Analytics for the Real

question 54

Multiple Choice

Article Summary
RealtyTrac,a provider of housing data and analytics for the real estate industry,conducted an analysis of home values,appreciation,and property taxes in zip codes where either a Whole Foods Market or a Trader Joe's are located.The findings are as follows:
-Homeowners near a Trader Joe's experienced an average 40 percent increase in home value since the date of purchase,had average home values of just over $590,000,and paid an average of $8,536 in annual property taxes.
-Homeowners near a Whole Foods Market experienced an average 34 percent increase in home value since the date of purchase,had average home values of just over $560,000,and paid an average of $5,382 in annual property taxes.
- Homeowners in general for all zip codes nationwide experienced an average 34 percent increase in home value since the date of purchase,had average home values of just over $260,000,and paid an average of $3,239 in annual property taxes.
-Refer to the Article Summary.Assuming the findings are correct and all else equal,higher increases in home values which result from close proximity to a Trader Joe's are an example of a ________ due to the location of the Trader Joe's.

• A)positive externality
• B)negative externality
• C)private cost
• D)social cost

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Definitions:

Average Fixed Cost

The fixed costs of production (costs that don't change with the level of output) divided by the quantity of output produced.

Marginal Product

The additional output resulting from a one-unit increase in the input of a particular productive resource, holding all other inputs constant.

Average-Total-Cost

The cost per unit of output, calculated by dividing the total cost (fixed and variable costs) by the total quantity produced.

Marginal-Cost

The expense associated with producing one additional unit of a good or service, critical for decision-making in business and economic policy.