urban economics

5. [10 pts] Consider a circumferential city with 10 miles radius, where the residential area occupies the rst 3 miles from the center, and the remaining 7 miles are permitted for agricultural use only. Assume the value of land is higher closer to the center. Suppose that the city mayor is considering extending the residential area (radius) from 3 to 5 miles (using a controlled urban growth program, converting agricultural land to residential). If you were to develop a Leli- nancing program under which landowners who gain from the boundary extension compensate landowners who lose from it. For each of the following individuals, indicate whether he or she will be a \"compensator \"or \"compensatee.\" a. Aysha owns land 2.5 miles from the city center. Aysha is a ...... b. Matt owns land 4 miles from the city center. Matt is a