# Consider a city that surrounds a noisy airport. Suppose that there is no commuting travel in the city

Question:

Consider a city that surrounds a noisy airport. Suppose that there is no commuting travel in the city, with the residents either retired or working at home. As a result, the only locational factor that matters is the distance to the airport, which determines how much a resident must endure (noise fall as distance increases). Following the arguments from class, how would be the spatial behavior of the price per sq foot of housing (p)?

a) p rises as distance to the airport increase.

b)p falls as distance to the airport increase.

c)p initially falls but then rises as distance to the airport increase.

d) p initially rises but then falls as distance to the airport increase.

e)The spatial behavior of p is ambiguous: p may be fall or rise, depending on how much the residents dislike the noises.

PART B)

Now suppose that the city contains two groups of residents, strong noise-haters and mild noise-haters. The first group is strongly bothered by noise, while the second group doesn’t mind it as much. Each group has its own p curve, denoting ps for the strong-noise haters and pm for the mild noise haters. What is the correct description on the difference between ps and pm?

a)Both are positively sloped, but ps is steeper than pm.

b)ps and pm would exactly be the same, since there is no commuting cost in this situation.

c)Both are positively sloped, but ps is flatter than pm.

d)Both are negatively sloped, but ps is steeper than pm.

e)Both are negatively sloped, but ps is flatter than pm.