Solution Found!
Segway for Information Workers The Segway Human Transporter is a self-balancing personal transportation vehicle that is clean (battery powered) and small (its footprint is 19 by 25 inches) so it can be used on sidewalks and inside buildings. Suppose the segway is introduced into a CBD, doubling the speed of travel for information exchange. a. Show the effects of the segway on the bid-rent curve for the offi ce sector in two circumstances: • Fixed building heights: Offi ce fi rms do not engage in factor substitution. The gap between the old bid-rent curve and the new bid-rent curve [increases, decreases] as distance increases. • Variable building heights. b. In the long run, the bulk of the benefi ts of the segway go to [offi ce fi rms, offi ce workers, landowners].
Chapter 6, Problem 7(choose chapter or problem)
Segway for Information Workers
The Segway Human Transporter is a self-balancing personal transportation vehicle that is clean (battery powered) and small (its footprint is 19 by 25 inches) so it can be used on sidewalks and inside buildings. Suppose the segway is introduced into a CBD, doubling the speed of travel for information exchange.
a. Show the effects of the segway on the bid-rent curve for the office sector in two circumstances:
• Fixed building heights: Office firms do not engage in factor substitution. The gap between the old bid-rent curve and the new bid-rent curve [increases, decreases] as distance increases.
• Variable building heights.
b. In the long run, the bulk of the benefits of the segway go to [office firms, office workers, landowners].
Questions & Answers
QUESTION:
Segway for Information Workers
The Segway Human Transporter is a self-balancing personal transportation vehicle that is clean (battery powered) and small (its footprint is 19 by 25 inches) so it can be used on sidewalks and inside buildings. Suppose the segway is introduced into a CBD, doubling the speed of travel for information exchange.
a. Show the effects of the segway on the bid-rent curve for the office sector in two circumstances:
• Fixed building heights: Office firms do not engage in factor substitution. The gap between the old bid-rent curve and the new bid-rent curve [increases, decreases] as distance increases.
• Variable building heights.
b. In the long run, the bulk of the benefits of the segway go to [office firms, office workers, landowners].
ANSWER:Step 1 of 2
a.
i. Maximum allowable construction heights:
If building heights were a constant, then the effects of the segway on the bid-rent curve for the office sector would be different. On the other hand, if office businesses participated in factor substitution, then the impacts of the segway would be the same. If building heights were made immovable, then the Segway would be able to increase the pace of travel for the transmission of information, and the difference between the old bid-rent curve and the new bid-rent curve would narrow with increasing distance. If, on the other hand, office businesses were to engage in factor substitution, the Segway would make it possible for them to move closer to their customers and suppliers; however, the chasm that exists between the old bid-rent curve and the new bid-rent curve would widen as the distance between the two parties increased.
In principle, the impact of the Segway on the bid-rent curve would be contingent on the particular conditions under which it was first implemented.
ii. Building heights that vary from one another.
Substituting one aspect for another is something that office companies do. The difference between the old bid-rent curve and the new bid-rent curve widens as the distance between the two points becomes greater.