n class we introduced a case where the incidence (who gains and who loses) from changes in environmental quality could be surprising because of the resorting in a new equilibrium. In this example, we continue with the same type of setup: Neighborhood A will have a price of 0 regardless of the number of people living there, whereas the price equals the number of households in all other neighborhoods. The utility of a person living in a neighborhood is U = EQ P . There are two types, who are describe below