Opportunity Cost and Offi ce Bid-Rent Curve Using Table 6–4 and Figure 6–3 as a starting point, suppose the opportunity cost of travel by offi ce workers increases by 25 percent. a. At a distance of fi ve blocks, travel cost 5 ; the willingness to pay for land 5 ; the bid rent per hectare 5 . b. Draw the old and the new bid-rent curves for the offi ce sector. c. The new bid-rent curve is [fl atter, steeper] and reaches a value of zero at a distance of x 5 .

QUESTION:

Opportunity Cost and Office Bid-Rent Curve

Using Table 6–4 and Figure 6–3 as a starting point, suppose the opportunity cost of travel by office workers increases by 25 percent.

a. At a distance of five blocks, travel cost = ______ ; the willingness to pay for land = ______ ; the bid rent per hectare = ________.

b. Draw the old and the new bid-rent curves for the office sector.

c. The new bid-rent curve is [flatter, steeper] and reaches a value of zero at a distance of x = ________.