This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Suppose you had information on the sales of similar homes just east and just west of the boundary ... (Read 74 times)

fnuegbu

  • Hero Member
  • *****
  • Posts: 539
on: Jun 29, 2018
Suppose you had information on the sales of similar homes just east and just west of the boundary between two school districts. How could you use those data to estimate the value parents place on the quality of their children's schools?
 
  What will be an ideal response?

Question 2

What does it mean for a firm to be breaking even?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

beccamahon

  • Sr. Member
  • ****
  • Posts: 338
Reply #1 on: Jun 29, 2018
Answer to Question 1

Families optimize when they choose homes. Suppose schools on the west side of the school boundary are better than the schools on the east side. Families are willing to buy homes on both sides of the boundary. This means that when families optimize they do just as well buying a home in either school district. Therefore, the prices of homes on the east side have to be just enough lower than the prices on the west side to persuade families to live in either district. A well-known study by Sandra Black relied on this line of argument and found that parents were willing to pay 2.5 percent more for a home if their children could attend schools with 5 percent higher test scores.
See Sandra E. Black Do Better Schools Matter? Parental Valuation of Elementary Education, Quarterly Journal of Economics, May

Answer to Question 2

If a firm is breaking even, it is earning exactly a normal rate of return. This means that total revenue is just enough to cover all economic costs including a normal profit.


fnuegbu

  • Member
  • Posts: 539
Reply 2 on: Jun 29, 2018
Wow, this really help

FergA

  • Member
  • Posts: 352
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

Drug abusers experience the following scenario: The pleasure given by their drug (or drugs) of choice is so strong that it is difficult to eradicate even after years of staying away from the substances involved. Certain triggers may cause a drug abuser to relapse. Research shows that long-term drug abuse results in significant changes in brain function that persist long after an individual stops using drugs. It is most important to realize that the same is true of not just illegal substances but alcohol and tobacco as well.

Did you know?

The average office desk has 400 times more bacteria on it than a toilet.

Did you know?

Adolescents often feel clumsy during puberty because during this time of development, their hands and feet grow faster than their arms and legs do. The body is therefore out of proportion. One out of five adolescents actually experiences growing pains during this period.

Did you know?

A good example of polar molecules can be understood when trying to make a cake. If water and oil are required, they will not mix together. If you put them into a measuring cup, the oil will rise to the top while the water remains on the bottom.

Did you know?

The FDA recognizes 118 routes of administration.

Major trunk lines carrying long-distance traffic crisscrossed the area east of the Mississippi. The Major trunk lines carrying long-distance traffic crisscrossed the area east of the Mississippi. The
Maidens and Stewards, fragment of the Panathenaic Procession, from the east frieze of the Parthenon, ... Maidens and Stewards, fragment of the Panathenaic Procession, from the east frieze of the Parthenon, ...
Restricting visual information to one hemisphere in cats. To restrict visual information to one ... Restricting visual information to one hemisphere in cats. To restrict visual information to one ...
A Simplified Model of Information Flow in Human Memory A Simplified Model of Information Flow in Human Memory
West Antarctic Ice Sheet West Antarctic Ice Sheet
Video: Allergic Rhinitis

For a complete list of videos, visit our video library