Note: Apply graphs where applicable

1. Telecommuting refers to a system under which employees work at home for one or more days per week and use personal computers and telephone lines to interact with people in the office. Consider an office firm that must decide whether to locate in the Central Business District or along a suburban beltway (to be closer to its suburban workforce). Discuss the effects of telecommuting on the relative attractiveness of the CBD.

2. Consider a modern city where firms are located in the central business district or along a circumferential highway. Congestion is not a problem; everyone travels at the legal speed limit. Suppose that in an attempt to internalize the pollution externalities from auto use, the city imposes a $2 per gallon tax on gasoline.Assume that (i ) everyone continues to drive himself or herself to work and (ii) the tax does not affect the spatial distribution of residences. Will the gas tax increase, decrease, or not affect the fraction of employment in the central business district?

3. Consider a modern city in which office employment has been steadily shifting from the city center to suburban locations along beltways. Suppose that the city improves its mass-transit system, decreasing the monetary and time costs of radial travel. Assume that the improvement in the transit system does not affect the spatial distribution of residents. Will the improvement in the system speed up or slow down the movement of office firms to the suburbs?

4. The development of the internal-combustion engine caused fundamental changes in urban land-use patterns. The transformation from the core-dominated city to the modern suburbanized city took only about 50 years. Given the rapid pace of technological change, it seems likely that some future innovation will cause another transformation of cities. Given your knowledge of science fiction and fact, describe an innovation that would cause fundamental changes in the spatial structure of cities.