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Multiple choice!

A new music venue opens up in town. The loud noise and rowdy crowds makes living in your neighborhood less desirable. Your home value drops. This is an example of what?

Government involvement

Spillover cost

Wealth gap

Inflation

User EKrueger
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1 Answer

3 votes

Answer:

Spillover cost.

Step-by-step explanation:

Spillover cost refers to those costs or changes in the value of a certain good that are caused by issues external to the intrinsic characteristics of said good. Thus, for example, external influences such as limitations on oil extraction or the development of electric cars can generate a massive drop in the prices of conventional gasoline cars. Another clear example of this situation is the one described in the question, where a negative change in a certain neighborhood can lower the prices of the houses found there.

User Cesar
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