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3. Consider a simple monocentric city model in which households are all identical, have income 3;, and utility function: U(q, z) = (1021 0 yl)

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3. Consider a simple monocentric city model in which households are all identical, have income 3;, and utility function: U(q, z) = (1021\" 0 yl) and so attain a higher utility level than Type One house- holds (g > 111). Use your Alonso-Muth condition from part c. to argue that the house price gradients for the two households are not the same, and that therefore their pricing functions must cross. What does this tell us about the location of the different types of household in the city? Explain briey

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