1. Suppose that Toronto and North York are two adjacent municipalities. North York provides luxurious, high-cost services for its residents; Toronto provides minimal low-cost services. Initially each municipality uses a poll tax to finance its services. The residential population is in equilibrium with nobody wanting to move from one municipality to the other. Now suppose that both municipalities switch from the poll tax to a property tax to finance their services. Which of the following is likely to occur?

a: the equilibrium will be unchanged, with nobody wanting to move

b: poorer people who buy low-cost properties will tend to move from North York to Toronto

c: poorer people who buy low-cost properties will tend to move from Toronto to North York

d: poorer people who buy low cost properties will not want to move but richer people will move from North York to Toronto

e: both poorer and richer people will want to move from North York to Toronto