Let's say there are two sectors of an economy, firms and households. Each household supplies labor to the firms.Households earn $100 per month, they spend $1 per mile to commute to work and they spend $50 on all other goods. Firms produce 1 ton of goods and earn $100 per month net profits on production, but must pay $10 per ton mile to ship its output to the port. All firms, residents use 1 acre of land. a. Calculate each sector's bid rent function. That is, what is each sector's ability to pay for a location as a function of distance to the center? How far from the center will land use change from business use to residential?

Let's say there are two sectors of an economy, firms and households. Each household supplies labor to the firms.Households earn $100 per month, they spend $1 per mile to commute to work and they spend $50 on all other goods. Firms produce 1 ton of goods and earn $100 per month net profits on production, but must pay $10 per ton mile to ship its output to the port. All firms, residents use 1 acre of land. a. Calculate each sector's bid rent function. That is, what is each sector's ability to pay for a location as a function of distance to the center? How far from the center will land use change from business use to residential?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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