Suppose Two Neighborhoods (A AndB)have Identical Housing,but Neighborhood a Has

question 122

Multiple Choice

Suppose two neighborhoods (A andB) have identical housing,but neighborhood A has a strictly enforced deed restriction that prohibits homeowners from parking junk cars in the front yard.If houses in neighborhood A sell for $105,000 and houses in neighborhood B sell for $100,000,how would an economist value the external cost of visible junk cars,per house?

• A) $205,000
• B) $105,000
• C) $100,000
• D) $5,000
• E) None of the above answers is correct.

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Definitions:

Comprehensive Income

The total change in equity for a reporting period other than from transactions with owners, including all unrealized gains and losses.

Statement of Changes

Refers to a financial statement that outlines the changes in equity of a company over a specific period due to transactions with owners and other comprehensive income.

Retained Earnings

The remaining net income for the company after distributing dividends to its shareholders.

Non-controlling Interest

An ownership interest in a subsidiary that is not significant enough to allow the holder to control or influence its policies.