Explore BrainMass
Share

Explore BrainMass

    three types of houses

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    In Metro, there are three types of houses: E (expensive), M (medium), and C (cheap). A recent survey suggest that there are three types of preferences for fire protection: H (high), I (intermediate), and L (low). Mr Wizard, an economic consultant to the city, recently made the following statement: "If my assumptions are correct , the shopping and sorting from the Tiebout process will generate three municipalities"

    a). Assume that Mr. Wizard's reasoning is correct. What are his assumptions?
    b). Suppose that the equilibrium number of municipalities turn out to be nine, not three. Where did Mr. Wizard go wrong? What set of assumptions would have given him the correction prediction?

    © BrainMass Inc. brainmass.com October 10, 2019, 2:53 am ad1c9bdddf
    https://brainmass.com/economics/preferences-choice/three-types-houses-398134

    Solution Preview

    an economic consultant to the city, recently made the following statement:
    In Metro, there are three types of houses: E (expensive), M (medium), and C (cheap). A recent survey suggest that there are three types of preferences for fire protection: H (high), I (intermediate), and L (low). Mr Wizard, an economic consultant to the city, recently made the following statement: "If my assumptions are correct , the shopping and sorting from the Tiebout process will generate three municipalities" ...

    Solution Summary

    This solution gives you a detailed discussion on three types of houses.

    $2.19