Solution Found!
Integration and Segregation Consider a city of 200 people (100 tall and 100 short) and two neighborhoods (100 people in each). People generally prefer to live close to short people. To draw the rent-premium curves, put the number of short people in neighborhood A (from 50 to 100) on the horizontal axis. The premium curve of tall people is concave from below, and in a neighborhood of 100 short people, the premium is $30. The premium curve of short people is linear, and in a neighborhood of 100 short people, the premium is $50. The two premium curves intersect at S 70 and premium $20. a. Draw the two premium curves. b. Integration (50 short, 50 tall) [is, isn’t] a stable equilibrium because. . . . c. A mixed neighborhood (70 short, 30 tall) [is, isn’t] a stable equilibrium because. . . . d. Segregation (100 short, 0 tall) [is, isn’t] a stable equilibrium because. . . .
Chapter 8, Problem 4(choose chapter or problem)
Consider a city of 200 people (100 tall and 100 short) and two neighborhoods (100 people in each). People generally prefer to live close to short people. To draw the rent-premium curves, put the number of short people in neighborhood A (from 50 to 100) on the horizontal axis. The premium curve of tall people is concave from below, and in a neighborhood of 100 short people, the premium is $30. The premium curve of short people is linear, and in a neighborhood of 100 short people, the premium is $50. The two premium curves intersect at S 70 and premium $20.
a. Draw the two premium curves.
b. Integration (50 short, 50 tall) [is, isn’t] a stable equilibrium because. . . .
c. A mixed neighborhood (70 short, 30 tall) [is, isn’t] a stable equilibrium because. . . .
d. Segregation (100 short, 0 tall) [is, isn’t] a stable equilibrium because…
Questions & Answers
QUESTION:
Consider a city of 200 people (100 tall and 100 short) and two neighborhoods (100 people in each). People generally prefer to live close to short people. To draw the rent-premium curves, put the number of short people in neighborhood A (from 50 to 100) on the horizontal axis. The premium curve of tall people is concave from below, and in a neighborhood of 100 short people, the premium is $30. The premium curve of short people is linear, and in a neighborhood of 100 short people, the premium is $50. The two premium curves intersect at S 70 and premium $20.
a. Draw the two premium curves.
b. Integration (50 short, 50 tall) [is, isn’t] a stable equilibrium because. . . .
c. A mixed neighborhood (70 short, 30 tall) [is, isn’t] a stable equilibrium because. . . .
d. Segregation (100 short, 0 tall) [is, isn’t] a stable equilibrium because…
ANSWER:Step 1 of 5
Given:
In a neighborhood of 100 short people, the premium curve for tall persons is concave from below, and it is $30. In a neighborhood of 100 short people, the premium is $50, and the premium curve for short people is linear. At S 70 and premium $20, the two premium curves meet.