There are two cities located in Canada. One is called Vancouver and the other is Toronto. Assume workers and firms can migrate for a cost of zero between the two cities. Suppose that Vancouver elects an environmentalist as Mayor and the mayor increases local pollution taxes. Predict how the composition of polluting industries will change in each of the two cities following the policy change. Use housing demand and supply graphs in the two cities to predict how real estate prices in the two cities will be affected following the policy change.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Economics
There are two cities located in Canada. One is
called Vancouver and the other is Toronto.
Assume workers and firms can migrate for a cost
of zero between the two cities.
Suppose that Vancouver elects an
environmentalist as Mayor and the mayor
increases local pollution taxes.
Predict how the composition of polluting
industries will change in each of the two cities
following the policy change.
Use housing demand and supply graphs in the
two cities to predict how real estate prices in the
two cities will be affected following the policy
change.
Transcribed Image Text:Economics There are two cities located in Canada. One is called Vancouver and the other is Toronto. Assume workers and firms can migrate for a cost of zero between the two cities. Suppose that Vancouver elects an environmentalist as Mayor and the mayor increases local pollution taxes. Predict how the composition of polluting industries will change in each of the two cities following the policy change. Use housing demand and supply graphs in the two cities to predict how real estate prices in the two cities will be affected following the policy change.
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