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Suppose Two Neighbourhoods with 10 Homes Each in Sydney Are

Question 78

Multiple Choice

Suppose two neighbourhoods with 10 homes each in Sydney are identical except one of them is near a toxic waste dump. If homes near the dump sell for an average of $40,000 and the other homes sell for $90,000, the external cost of the dump is


A) $1,300,000.
B) $400,000.
C) $900,000.
D) $90,000.
E) $500,000.

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