The City of Gotham used to be crime-ridden. Since the city government cooperated with Batman, the crime rate has dropped dramatically. Suppose people in general likes low crime rates, although the crime rate is irrelevant for a firm’s productivity. Further, assume that Gotham specializes in industries that DO NOT benefit from agglomeration. As the crime rate declines.

Suppose all residents of Gotham full time and each resident rents an apartment. The wage rate for each worker reduces by 1,000 dollars each month and the rent increases by 500 dollars. Can you say anything about how much do residents of Gotham value the lower crime rate?

Answer rating: 100% (QA)

Absolutely based on the information provided we can infer that the residents of G... View the full answer