Consider a monocentric city where everyone commutes to the city centre by automobile. Suppose the introduction of a robot cars (self-driving cars), such as Tesla, decreases the cost of commuting.

• a) In the urban land market, how does the introduction of robot cars change the demand of residential land use? Explain.
• b) In the labor market, how does the changes in the residential land market in part (a) affect the supply of labor? Explain.
• c) In the urban land market, how does the change in labor supply in part (b) affect the demand of business land? Explain.
• d) In the labor market, how does the changes in the business land market in part (c) affect the demand of labor? Explain.
• e) In the labor market equilibrium, how does the introduction of robot cars affect the total employment in the city? Argue why the change in equilibrium wage is ambiguous.
• f) In the urban land use equilibrium, illustrate the change in business territory and residential territory on a graph.