menu
User qa_get_logged_in_handle sort

The City of Gotham used to be crime-ridden. Since the city government cooperated with Batman, the...

User qa_get_logged_in_handle sort

The City of Gotham used to be crime-ridden. Since the city government cooperated with Batman, the...

by Chief of LearnyVerse
(321k points)
in Economics
18 views
0 votes


The City of Gotham used to be crime-ridden. Since the city government cooperated with Batman, the crime rate has dropped dramatically. Suppose people in general likes low crime rates,
although the crime rate is irrelevant for a firm’s productivity.
Further, assume that Gotham specializes in industries that DO NOt benefit from agglomeration. As the crime rate declines,
Suppose all residents of Gotham full time and each resident rents an apartment. The wage rate for each worker reduces by 1,000
dollars each month and the rent increases by 500 dollars. Can you say anything about how much do residents of Gotham value the lower crime rate?

1 Answer

by Chief of LearnyVerse
(321k points)
0 votes

Wage rates are reducing each month and

Conversly, rent increases by half of wages every month.

In this scenario , in few months the rent will surpass wages and it will lead to negative mark I savings .

The demand for crime free Gotham by the citizens is not impacted by the wages or rent incurred to them . So it is highly or near perfectly inelastic with the costs associated with it. As the demand for less crime rates remains the same.


Related questions

0 votes
33 views 1 answer
0 votes
4 views 1 answer
0 votes
11 views 1 answer
0 votes
16 views 1 answer
0 votes
11 views 1 answer
0 votes
13 views 1 answer
0 votes
6 views 1 answer
0 votes
4 views 1 answer
0 votes
6 views 1 answer
0 votes
0 views 1 answer
We Encourage everyone to post their own content in Learnyverse, we never encourage copying of content from other sites.

JOIN US

Categories

Recent Badges

Notable Question Get Answers
Notable Question Get Answers
Notable Question 10thGuru
Popular Question 10thGuru
Notable Question 10thGuru
Notable Question Get Answers
Notable Question Get Answers
Famous Question 10thGuru
Notable Question Get Answers
Notable Question Berries
Top Users Nov 2022
  1. Get Answers

    321270 Points

  2. Berries

    151250 Points

  3. God_Of_FreeFire

    82070 Points

  4. tony#shark

    74255 Points

  5. 10thGuru

    41615 Points

  6. Lalit Kumar

    41395 Points

  7. Taniya

    35115 Points

  8. John_ka_Sena

    30560 Points

  9. Vicky

    28505 Points

  10. CPT_SUSHEN_THB

    18445 Points

#500 points as Reward for all the above users