1.1 Basic questions 1.1a. Under which conditions is the optimal location in the Weberian triangle a location on one of the lines connecting two of the corners of the triangle? Clearly explain your answer. 1.1b. The production function of the firm deciding its optimal location is a Leontief production function. Clearly illustrate graphically the key characteristics of a Leontief production function. Also provide a mathematical description of the Leontief production function. You may want to check a basic textbook on Microeconomics to answer this question. 1.1c. What is the fundamental difference between the classical location model and the Moses-model? Focus in your answer on the fundamental difference between the production technologies .What is the implication of this difference for the optimal location and the optimal decision on the input mix for the firm? 1.1d. Explain how firms can derive monopoly power from its location decision? What is the relationship between monopoly power and the slope of the demand curve? Explain your answer. 1.1e. What is the "Bertrand problem"? Explain your answer. 1.1f . What is the "Hotelling paradox"? Explain your answer. 1.19. What is the role of price competition in the Hotelling analysis? 1.2 Location behavior Consider a firm with one market location in the city of Amsterhague. The firm uses two types of inputs which it gets from two cities, Ironia and Stonecity. The distance between Ironia and Stonecity is 400 kilometers. The distance between Amsterhague and Ironia as well as between Amsterhague and Stonecity is 300 kilometers. The firm can sell its final product in Am sterhague at a price of 30,- per unit sold. To produce one unit, it requires two units of the input from Ironia and eight units from Stonecity. OXFORD