solution

1. Consider the von Thunen’s model of land use. When the average lot size (S) increases and per unit per mile transportation costs (t) fall for a given sector like manufacturing, then:

Group of answer choices:

-the bid-rent curve flattens and the intercept term decreases so firms in that sector tend to move further from the Central Business District.

-the slope of the bid rent curve steepens and the intercept term increases so firms move closer to the Central Business District.

-the slope of the bid rent curve steepens but the intercept term decreases so firms move closer to the Central Business District.

-the slope of the bid rent curve flattens but the intercept term increases so firms move further from the Central Business District.

2. What would happen if the federal government were to subsidize housing insurance for property losses due to lead contamination in the soil?

Group of answer choices

-More lots closer to the lead smelting plant would be condemned and the owner paid a “fair market price” for this taking.

-The government would have more money to spend on soil cleanup because more taxes can be collected on sold lots.

-There will be no effect on the land market.

-More lots closer to the lead smelting plant would be sold.