The household first starts up at x=10

Reference no: EM13716718

Question 4
Consider the example of Households' bid rents curve from the Notes
Like in the notes assume the household first starts up at x=10 where the rent is $0.30 per square foot. The household choses an apartment with 1,000 square feet. However and in contrast to the notes, the preference (=utility curves) are now not convex. In fact, housing and non-housing goods are perfect complements. When this household moved closer to the city center, to x=5, what is his rent per square foot, how big will his apartment be and what is the total rent paid. Also, draw a sketch and show the equilibria at x=10 and at x=5.
Question 5:
Consider the streetcar case given in the Notes to Ch. 7. (B. A General Equilibrium Model of a Monocentric City). Assume the following Bid Rent Curves:
Offices: P=200-4x; Office Workers P=180-2x; Agricultural Land : P=140
(a) Where do the three groups locate?
(b) Now assume the city grants Office Workers a Transit Pass which will lower their marginal transportation cost by 0.5 $ per x. If this did not induce any change in the local labor supply, how does this alter the locations choices?
(c) Now, further developing (b), assume that the Transit Pass attracts more workers to the city. As a result, wages fall by $10. Calculate the new equilibrium locations.

Reference no: EM13716718

Questions Cloud

What tendencies about flotation costs : As a recent business school graduate, you work directly for the corporate treasurer. Your corporation is going to issue a new security and is concerned with the probable flotation costs. What tendencies about flotation costs can you relate to ..

Everyone-men, women, and children : Is it desirable and possible for "everyone-men, women, and children" to "go back to the kitchen," and what obstacles do you see in the way creating such a movement or trend? How does another essay () confirm or complicate Flammang's ideas?

Write a computer program to solve the dispersion relation : Write a computer program to solve the dispersion relation V(1-b)^0.5 =mπ+arctan(b/(1-b))+arctan((b+a)/(1-b)). (a) We wish to fabricate a planar waveguide in GaAs (n = 3.6) for light of wavelength λ = 1.3 μm that will operate only in the fundamen..

The thickness of the gaas layer : GaAs (n = 3.6) for light of wavelength λ = 1.3 μm that will operate only in the fundamental mode. Assuming the cover layer is air and the substrate has a refractive index ns = 3.5, what range of the GaAs layer thickness can be? (b) If we want t..

The household first starts up at x=10 : Like in the notes assume the household first starts up at x=10 where the rent is $0.30 per square foot. The household choses an apartment with 1,000 square feet. However and in contrast to the notes, the preference (=utility curves) are now not..

Small businesses found in the service-producing sector : Why are most small businesses found in the service-producing sector? Identify five small service-producing businesses that you patronize frequently. What kinds of small businesses are found in the goods-producing sector? What small goods-produc..

An effort to move the economy out of a recession : In an effort to move the economy out of a recession, the federal government would engage in expansionary economic policies. Respond to the following points in your paper on the actions the government would take to address expansionary fiscal a..

All over the world are involved in providing education : It is common knowledge that governments all over the world are involved in providing education for their citizens. To gauge the effectiveness of public education, federal government, states, and independent agencies measure achievement regularl..

How does each influence the state government : Post a 4-5 pg paper. Identify and provide a description of one interest group and its connection or relationship to each of the two principal political parties. How does each influence the state government ?

User Account

All Pages