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Question2
a) Length distance, its population(L), × is the edge of the block from the
Consumes 0.01 square of land yA <y +L the costs of commuting is 0
When rural urban migration takes place yA –costs of housing in rural areas<y-cost of
commuting- costs of housing
This implies that yA<Y-Tx in migration cases
Y= YA- Tx(L)
X= (YA- Y)/TL
b) The chance of getting a single job in city is JIL and expected income is y(JIL) while
disposable income = y(JIL)- Tx. Rural-urban migration is can be achieved if disposable
income = rural income
For instance rural-urban movement is y- Tx(L) =Y A…………(1)
X= (YA- Y)/TL……….(2)
Substitute (1) into (2)
Rural income = y(JIL)- LYA- (Y)T
= y(JIL)- T(YA- Y)/L multiply through by L to obtain
2
= L y(JIL)- L(YA)- YT
L = 180, 0000
The distance the edge of the city is
Area of land = uL
Radius of the city is πx2= uL
X = √uL/π = ←√0.01*180000/π= 572.956
Spending = y(JIL)- Tx = 12,000*30000-100*572.956
=$359, 942,704.4
When y, which is income, earned in urban employment increases, the population rises for
city resident. It increases the distance at the edge of the city. As a result, the amount of
money spend on residents in city also rise.
Question 3
Relative location of poor and rich in the CBD X. for us to draw and make intuitive decision based on the
precise equations we need to look at the real world, rich side in suburb and those poor residents who
reside in the city. We draw a graph of the two to show their location indifference through up and down
arrows as we pay attention to when X=5.
d) A graph of PR and Pp is re-drawn when the city is crime-free. The diagram shows that the arrow
or curve for rich shifts towards zero away from x=5. It moves far from equilibrium leading to
reduction in number of poor and an increase in the rich population.
e) The policy introduced by the government to wipe out crime in city doesn’t improve the lives of
the poor residents. They need jobs to improve their lives and engaging in crime related activities
was as a result of unemployment. In that case, wiping crime does not change their living
standards.