Consider a monocentric city as we've studied. Unless specified, assume we are in a closed city...

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Consider a monocentric city as we've studied. Unless specified, assume we are in a "closed city" world let: •y be income *t be commuting costs •h be housing consumption *c be non-housing consumption (with price, Pc = 1) *x be distance from the CBD (a) Write down the consumer's budget constraint (b) Write down the equilibrium conditions that characterize household location choice (c) How might you rearrange the equilibrium condition equation to enhance intuition? Re-arrange and describe in words the intuition. Now suppose commuting costs increase (d) Describe what happens to the bid-rent AND draw it (e) What happens to density? Explain (f) What happens to the footprint (e.g. the urban fringe) of the city ? Explain (g) What happens to rents at the CBD (x = 0)? Explain (h) How would this change if we instead considered an "open city"? Explain Consider a monocentric city as we've studied. Unless specified, assume we are in a "closed city" world let: •y be income *t be commuting costs •h be housing consumption *c be non-housing consumption (with price, Pc = 1) *x be distance from the CBD (a) Write down the consumer's budget constraint (b) Write down the equilibrium conditions that characterize household location choice (c) How might you rearrange the equilibrium condition equation to enhance intuition? Re-arrange and describe in words the intuition. Now suppose commuting costs increase (d) Describe what happens to the bid-rent AND draw it (e) What happens to density? Explain (f) What happens to the footprint (e.g. the urban fringe) of the city ? Explain (g) What happens to rents at the CBD (x = 0)? Explain (h) How would this change if we instead considered an "open city"? Explain