Smith and Jones Live in Virtually Identical Homes in the Same

Multiple Choice

Smith and Jones live in virtually identical homes in the same town. Smith sends her children to a private school because the public school in her part of town is a low-ranked school.  Annual tuition per student at the private school is $19,000.  Jones sends her children to the high-ranked public school on her side of town.  Tuition per student per year at the public school is $0.  Most people believe that the private school and the public school in Jones's neighborhood are equivalent when it comes to educating students. According to a theory discussed in the textbook,

A) the price of Smith's house is probably higher than the price of Jones's house.
B) the price of Jones's house is probably higher than the price of Smith's house.
C) Smith and Jones live in homes that are priced the same.
D) the reputations of schools have no impact on housing prices.