(c) $15 (d) $ 20 Q14-Q15 are based on the following information. Consider a mode
ID: 1114451 • Letter: #
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(c) $15 (d) $ 20 Q14-Q15 are based on the following information. Consider a model of information exchange in the CBD. Suppose there are five blocks, or Tive plots of land of equal size, in a CBD. Zoning regulations require that only two-storey g n be built on each plot. Each block is occupied by a single firm. All the blocks are connected by a covered sidewalk. 1 km Each day, each firm sends one representative to visit all other firms. All representatives walk at a speed hour. To simplify, to walk for one block is approximately 1 km. aket waerae of a representative ia $50hgur. There are 20 working days'per month. Hello The monthly travel cost incurred by the firm located in block D is: (a)$1.200 14. 0-(D)$1,400 $2.400 (c) (d) o- uo_ $2.800 15. Suppose all the firms produce the same output. They are equally productive, i.e. the non-land costs and other costs are also equal. What is the difference in monthly rents paid by a firm at C and a firm at E for the plot of land (area 1km*0.5km)? (a) $600 (b) $800 (c) $1,200 (d) $1,600Explanation / Answer
Ans 4. Monthly travel cost of firm D will be as follows
a. Person will start from plot D and reaches plot E i.e. he travels 1KM
b. From plot E he begins to travel toward plot A covering plot C & B inbetween thus he travels a total of 5KM from plot E to plot A to cover all the plots.
c. Thus in total he travels a total of 6KM daily therefore he takes 1.2 hrs daily (i.e. 6/5 hrs)
d. so daily payment for the person to cover all the plots is 1.2 * 50 = $60
e. by working for 20 day the person will earn = 60 * 20 = $1200
Therefor the correct answer is part (a) $1200
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