17.1. Discuss the patterns of worker and firm relocation within metropolitan areas in the 20sth Century. Discuss the patterns of worker and firm migration between metropolitan areas in the 21st Century.
17.2 What drives residential suburbanization? What drives employment suburbanization. Who is left in the urban core?
17.3. What is wrong with suburbanization?
17.4 Why are cities in the US less dense than similarly sized cities in the rest of the world? What problems does this cause?
17.5. Explain how the internal combustion engine affected urban land use patterns in the post WWII period. How did this change the urban landscape? What effects did this have on the central urban area? What role did agglomeration economies and locational differentiation play? Be sure to include any relevant graphs.
18.1. Open the Mathematica notebook, Public Goods Median Voter. When the graph opens, it displays the individual and aggregate demand of three consumers with different levels of income. What are the individual Lindahl equilibrium prices of the consumers? , , and . Note that the consumer surplus of the blue consumer is the area below his demand curve, above his price level and left of the output level. Suppose the government has to rely on the stated valuation of each consumer to determine their price. The blue consumer decides to misrepresent his valuation as zero. Move his a1 slider to zero to eliminate his demand from the Lindahl equilibrium. Note that the equilibrium output falls. What is its value? . The blue consumer still actually values the marginal unit of public good at the original price. Return the a1 parameter to 0.5. If the blue consumer free rides, he pays nothing but can consume the second level of output That you just found. The consumer surplus from free riding is the area under the actual blue demand curve, above the zero price level, and left of the second output level. How does this compare to the original consumer surplus? __. This is why the blue consumer has an incentive to misrepresent his true valuation.
Now suppose there are three identical suburbs, each with a blue, orange, and green consumer. The suburbs tax each of the consumers 1/3 of the marginal cost of the public good for each unit provided. How much would each of the consumers demand at this price? , , and . What is the median vote of the consumers? . Now suppose the blue and green consumers leave each of the suburbs and form their own. You can graph this by setting the w values to all 10 for blue and all 30 for green. What are the Lindahl equilibrium prices and outputs in the blue , , orange , and green , . suburbs? Would anyone want to move or free ride? _
8.2 Now suppose that residents of a municipality have different preferences for lot sizes, which are private goods. The municipality uses property taxes based on lot area to raise revenue. The demand for municipal services, however, depends more on the number of residents than the lot area. For example, suppose identical families of four live on either large lots of one acres or small lots of one quarter acre. Each family demands 10 dollars of municipal services.
What tax rate per acre would a municipality with one family on a large lot and one family on a small lot need to raise 20 dollars using a property tax? . How much would the large lot pay, and the small lot pay? and . The large lot owner would prefer a municipality with two large lots. What tax rate would the municipality need per acre and still raise 20 dollars. How much would the lot owners pay in taxes?
In municipalities with two small lot owners, what the tax rate would be needed to raise 20 dollars? . Where would owners of small lots prefer to locate? . Explain why exclusionary zoning is beneficial for the large lot municipality..
18.3.1 Manipulate the siders in the Mathematica notebook Rent Premia to indicate fully segregated neighborhoods. Show a screen shot and explain.
18.3.2 Manipulate the siders in the Mathematica notebook Rent Premia to indicate fully integregated neighborhoods. Show a screen shot and explain.
18.3.3 Manipulate the siders in the Mathematica notebook Rent Premia to indicate partially integrated neighborhoods. Show a screen shot and explain.
18.4 Open the Mathematica notebook Moving 1. When the graph opens it shows the decision to move due to depreciation when the cost of moving is $8. Manipulate the graph so that the homeowner faces moving costs of $18. Show a screen shot and explain.
18.5 Open the Mathematica notebook Moving 2. When the graph opens it shows the decision to move due to increasing income from $60 to $90. Manipulate the graph so that the homeowner’s income increases from $60 to $100 before they move. What is the cost of moving consistent with this example? _. Show a screen shot and explain.
18.6. Open the Mathematica notebook, Industry Equilibrium. Manipulate the model so that it is in long-run price level in the housing market? Show a screen shot.
Now suppose demand for housing increases. Manipulate the model so that it is in long-run price level in the housing market? Show a screen shot.
Compare this model with the empirical evidence on housing prices over time.
18.7 Use the Mathematica notebook Subsidy Analysis to explain why do most economists prefer housing vouchers to publicly provided housing as a means of subsidizing low-income housing? Be sure to include any relevant graphs. You may want to review the material in chapter six to help you answer.
18.8. Where have all the jobs gone? How has this contributed to the problems of residential sorting? Be sure to include any relevant empirical evidence.
18.9. List and explain the great myths concerning housing markets. How is this relevant to the graph of the Case-Shiller housing price index from 1890 to the present?
18.10 Open the Mathematica notebook, Industry Equilibrium . Increase the demand for housing, but assume that no additional housing can be built (supply is fixed).
What happens to housing prices? Explain how growth controls affect the price of housing in a city. Relate this theory to evidence from New York, Boston, and/or San Francisco.