1. Choose true or false for each question. (2pt for each).. -26. According to the variety of choice model, when the number of customers increases in a town, small firms with lower economies of scale would be pushed out from the town because big firms with higher economies of scale replace them... 1-27. The variety of choice in consumption is usually higher in a small rural town than a metropolis... 1-28. When the variety of choice in labor market increases in a town, it implies that the variety of choice in urban amenities also increases in the town... 1-29. According to the variety of choice model, firms prefer to locate in a small but specialized city because they usually want to hire skilled worker at a lower cost.. 1-30. The benefit of the variety of choice in labor market is based on the economies of scale from the labor market size