Choose the best answer in the bracket [ ].

Question 1.1

Gentrification [increases / decreases / does not change] the price of low-quality housing because it [increases / decreases / does not change] downward filtering and [increases / decreases / does not change] upgrading. Both effects result from an [increases / decreases / does not change] in the price of high-quality housing.

Question 1.2

Suppose the quantity of high-quality housing is 75 in year t-1, and the downward filtering rate is 20 percent. If the quantity of new housing is 10 per year, the quantity of high-quality housing in year t is [50 / 70 / 75 / 85] dwellings.

Question 1.3

Following our market filtering model, indicate the relationship for each pair of variables:[positive / negative / neutral / ambiguous]

Parameter	Choice Variable	Relationship
price of high-quality housing	filter rate
price of low-quality housing	filter rate
wage of repair workers	filter rate

Question 1.4

In the general-equilibrium model of a two-city region, housing firms shift the structure portion of the property tax onto [consumers / landowners / capital owners] because the region-wide supply of capital is assumed to be [perfectly elastic / perfectly inelastic / costless / unlimited].

Question 1.5

In the general-equilibrium analysis, the structure portion of the property tax generates zero-sum changes in [housing service price / structure rent / land rent] across cities. These changes generate locational indifference for [consumers / landowners / capital owners].

Question 1.6

Following our model on local government revenue, indicate the relationship for each pair of variables:[positive / negative / neutral / ambiguous]

Parameter	Choice Variable	Relationship
structure tax: General equilibrium	price of structure
structure tax: General equilibrium	price of land in taxing city
structure tax: General equilibrium	price of land in other city