Contents
Chapter 10...........................................................3
Figure 10-1: Willingness to Pay for Agricultural Land....................................3
Figure 10-3: Manufacturing Rent in a Horse Cart City...................................4
Figure 10-4: Manufacturing Rent in a Truck City...........................................4
Figure 10-5: Manufacturing Land Rent in Beltway City..................................5
Figure 11-2: location and the Willingness to pay or Office Space..................6
Figure 11-3 Willingness to Pay and Commuting Mode..................................6
Figure 11-7: Greater accessibility Generates a Taller Building and a Higher
Land Price.......................................................................................................7
Figure 11-6 Willingness to pay for Office Land...............................................7
Figure 11-8: Isoquant for an Office Building...................................................8
Chapter 12...........................................................9
Figure 12-3: A Decrease in Commuting Cost Increases the Housing Price for
Nash Equilibrium............................................................................................9
Figure 12-5: Convex Housing-Price Curve: Outward....................................10
Figure 12-10: Lower Crime and Higher Housing Price for Nash Equilibrium
......................................................................................................................11
Chapter 16.........................................................12
Figure 16-3: The Market Effects of a Limit on Building Permits...................12
Figure 16-4: Market Effects of a Development Tax......................................13
Figure 16-5: Growth Boundary and the Housing Market.............................14
Figure 16-6: Growth Boundary and the Land Market..................................15
Chapter 17.........................................................16
, Figure 17-7: Value of Public Housing............................................................16
......................................................................................................................16
Chapter 18.........................................................18
Figure 18-2: Equilibrium versus Efficient Outcome......................................18
Figure 18-4: Gains and Losses from a Congestion Tax: Road User..............19
Figure 18-12: Traffic Accidents and Efficiency..............................................20
Chapter 19.........................................................21
Figure 19-5: Pricing for Transit: Efficiency versus Budget Balancing...........21
Chapter 20.........................................................22
Figure 20-2: Voter Disagreement.................................................................22
Chapter 21.........................................................23
Figure 21-8: Response to a Matching Grant.................................................23
Chapter 23.........................................................24
Figure 23-3: Expected Utility From Crime....................................................24
Figure 23-8: Probability of Success and Crime.............................................25
Figure 23-12 Equilibrium Occupational Choice............................................26
, Models:
Chapter 10
Figure 10-1: Willingness to Pay for Agricultural Land
Defining the graph:
¿
- p is the national price of corn
¿
- q is the quantity at which the farmer maximises profit
o Where marginal revenue equals marginal cost.
¿
- ac is the average cost
¿ ¿ ¿
- The area between p and ac and q is the profit rectangle.
o The area in the rectangle represents the total economic profit
Influential Factors:
- Level of fertility
o Marginally fertile land will push the ac ¿up and move the q ¿ to the left resulting in
the decrease in profit.
Assumptions:
- We assume that the bid for land will be equal to the economic profit.
- Perfect competition in the output market. Farmers are price takers, and economic profit is zero in
the long run.
- Common input prices. The prices of non-land inputs (materials, labour, capital) are the same
throughout the region.
- Land to highest bidder. Landowners rent land to the highest bidder.
- Zero transport costs. Transport costs are zero.
- National prices. All prices are determined in the national market and are unaffected by events in
the region.
Chapter 10...........................................................3
Figure 10-1: Willingness to Pay for Agricultural Land....................................3
Figure 10-3: Manufacturing Rent in a Horse Cart City...................................4
Figure 10-4: Manufacturing Rent in a Truck City...........................................4
Figure 10-5: Manufacturing Land Rent in Beltway City..................................5
Figure 11-2: location and the Willingness to pay or Office Space..................6
Figure 11-3 Willingness to Pay and Commuting Mode..................................6
Figure 11-7: Greater accessibility Generates a Taller Building and a Higher
Land Price.......................................................................................................7
Figure 11-6 Willingness to pay for Office Land...............................................7
Figure 11-8: Isoquant for an Office Building...................................................8
Chapter 12...........................................................9
Figure 12-3: A Decrease in Commuting Cost Increases the Housing Price for
Nash Equilibrium............................................................................................9
Figure 12-5: Convex Housing-Price Curve: Outward....................................10
Figure 12-10: Lower Crime and Higher Housing Price for Nash Equilibrium
......................................................................................................................11
Chapter 16.........................................................12
Figure 16-3: The Market Effects of a Limit on Building Permits...................12
Figure 16-4: Market Effects of a Development Tax......................................13
Figure 16-5: Growth Boundary and the Housing Market.............................14
Figure 16-6: Growth Boundary and the Land Market..................................15
Chapter 17.........................................................16
, Figure 17-7: Value of Public Housing............................................................16
......................................................................................................................16
Chapter 18.........................................................18
Figure 18-2: Equilibrium versus Efficient Outcome......................................18
Figure 18-4: Gains and Losses from a Congestion Tax: Road User..............19
Figure 18-12: Traffic Accidents and Efficiency..............................................20
Chapter 19.........................................................21
Figure 19-5: Pricing for Transit: Efficiency versus Budget Balancing...........21
Chapter 20.........................................................22
Figure 20-2: Voter Disagreement.................................................................22
Chapter 21.........................................................23
Figure 21-8: Response to a Matching Grant.................................................23
Chapter 23.........................................................24
Figure 23-3: Expected Utility From Crime....................................................24
Figure 23-8: Probability of Success and Crime.............................................25
Figure 23-12 Equilibrium Occupational Choice............................................26
, Models:
Chapter 10
Figure 10-1: Willingness to Pay for Agricultural Land
Defining the graph:
¿
- p is the national price of corn
¿
- q is the quantity at which the farmer maximises profit
o Where marginal revenue equals marginal cost.
¿
- ac is the average cost
¿ ¿ ¿
- The area between p and ac and q is the profit rectangle.
o The area in the rectangle represents the total economic profit
Influential Factors:
- Level of fertility
o Marginally fertile land will push the ac ¿up and move the q ¿ to the left resulting in
the decrease in profit.
Assumptions:
- We assume that the bid for land will be equal to the economic profit.
- Perfect competition in the output market. Farmers are price takers, and economic profit is zero in
the long run.
- Common input prices. The prices of non-land inputs (materials, labour, capital) are the same
throughout the region.
- Land to highest bidder. Landowners rent land to the highest bidder.
- Zero transport costs. Transport costs are zero.
- National prices. All prices are determined in the national market and are unaffected by events in
the region.
