
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Transcribed Image Text:À company mines 420,000 tons of coal per
year in a rural county. The coal is worth $63
per ton. The average price for a 2,000-square-
foot house with three bedrooms more than 20
km away from the mining site in this county is
$210,000. The
average price for a similar, 2,000-square-foot
house with three bedrooms within 4 km of the
mine is 4 percent lower.
Using comparative statics, what is the effect
of mining on home prices in this county?
Mining changes the price of a 2,000-square-
foot home (with three bedrooms) by $
(Round your response to two decimal places
and use a negative sign it necessary)
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