1. Explain factor substitution and consumer substitution. (20 points)
2. Why is the Housing Price Curve (Function) convex? (20 points)
3. Why does population density increase as we approach the city-center? (20 points)
4. Housing Price Function (40 points)
In class, we referred to the following expression as the Housing Price Function. It represents locational indifference.
a. Explain what this equation is really saying?
b. Put the above Housing Price Function in slope form.