Churches, Incinerators, and Housing Prices Recent hedonic studies of urban housing markets have concluded that the price of housing is higher closer to churches, and lower closer to incinerators. Suppose that price of a house one kilometer from a church is $7,000 higher than an identical house two kilometers from a church, and the relationship is linear. The price of a house one kilometer from an incinerator is $4,000 lower than an identical house two kilometers from an incinerator, and the relationship is linear. Consider a city where a church and an incinerator are two kilometers apart, with the church at x 0 and the incinerator at x 2. The price of housing at x 0 is $200,000.

QUESTION:

Churches, Incinerators, and Housing Prices

Recent hedonic studies of urban housing markets have concluded that the price of housing is higher closer to churches, and lower closer to incinerators. Suppose that price of a house one kilometer from a church is \($7,000\) higher than an identical house two kilometers from a church, and the relationship is linear. The price of a house one kilometer from an incinerator is \($4,000\) lower than an identical house two kilometers from an incinerator, and the relationship is linear. Consider a city where a church and an incinerator are two kilometers apart, with the church at \(x = 0\) and the incinerator at \(x = 2\). The price of housing at \(x = 0\) is \($200,000\).

(a). Draw a housing-price curve for \(x = 0\) to \(x = 4\).

(b). The slope of the housing-price curve is _____ per km for \(x = 0\) to \(x = 2\), and _____ per km beyond \(x = 2\).

(c). The road from the church to the fires of the incinerator is paved with progressively [more, less] expensive houses.