Students should be able to explain "voting with one's feet". Students should be able to use a sorting model to determine the allocation of local public goods across an urban area. Students will be able to explain the Median Voter Result. Students should be able to discuss neighborhood externalities. Students should be able to explain bidding for lots in desirable neighborhoods, draw rent premium curves for desirable neighborhoods, and identify stable equilibrium using rent premium curves for different types of people. Students should be able to describe the role of lot size in neighborhood sorting. Students should be able to explain the role of education and educational inputs in neighborhood sorting. Students should be able to identify which roles of government are performed at the national and local levels. Student should able to describe the three ways in which local government performs its role of resource allocation