The von Thunen model of urban space features rents which can change instantly. Assuming wage equality, answer the following: A) Which person pays the highest rent? Does that person have lower utility? B) Suppose a park is created on one side of the urban space. Do the people on that side of the urban space now pay higher rent? Which side has higher utility? C) Compare an contrast the effects on rent and utility if all schools are improved uniformly versus one school improving dramatically.

The von Thunen model of urban space features rents which can change instantly. Assuming wage equality, answer the following: A) Which person pays the highest rent? Does that person have lower utility? B) Suppose a park is created on one side of the urban space. Do the people on that side of the urban space now pay higher rent? Which side has higher utility? C) Compare an contrast the effects on rent and utility if all schools are improved uniformly versus one school improving dramatically.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 8PA

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