**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 p_{s} for the strong-noise haters and p_{m} for the mild noise haters. What is the correct description on the difference between p_{s} and p_{m}?

a)Both are positively sloped, but p_{s} is steeper than p_{m}.

b)p_{s} and p_{m} would exactly be the same, since there is no commuting cost in this situation.

c)Both are positively sloped, but p_{s} is flatter than p_{m}.

d)Both are negatively sloped, but p_{s} is steeper than p_{m}.

e)Both are negatively sloped, but p_{s} is flatter than p_{m}.

**Answer:**

Part A:-

(c.) p initially falls but then falls as distance to the airport increases.

This is because as there is no commuting travels in the city with the residents either retired or working from home so we can say that as the answer is simply that when the distance is less then the p was high but as the distance to the airport gets increases, fortunately, the P (Noise) get decreases or falls. As P is inversely proportional to the distance (more the distance less will be the pollution{p} ).

Part B:-

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

This is because as the Noise will affect both the party first as well as second so there will be negatively sloped in both the party. And due to the strong noise hater and mild noise hater, the ps is steeper than pm.