Suppose at location x = 10, households consume 120 units of housing and the monthly commuting...
- Suppose at location x = 10, households consume 120 units of housing and the monthly commuting cost per kilometer is $60. The slope of the housing-price curve is − $[____].
Homework Answers
Say the Budget for Housing is B
then Housing Price = B- 60*10 = B-600
Housing Price per unit = (B-600)/120
At X = 10, Housing Price per unit = (B-600)/120
Say of X=12, Housing Price = B- 60*12 = B-720
Housing Price per unit = (B-720)/120
At X = 12, Housing Price per unit = (B-720)/120
Hence slope = ((B-720)/120 - (B-600)/120)/(12-10)
=(B-720-B+600)/(120*2)
=-120/240
=-1/2
Hence Slope = -0.5
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Suppose at location x = 10, households consume 120
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