question archive Consider a residential city with a radius of 3 miles, where the value of land is higher closer the land is to the center
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Consider a residential city with a radius of 3 miles, where the value of land is higher closer the land is to the center. Suppose that the city mayor is considering extending its radius from 3 miles to 5 miles (controlled urban growth program). Your job is to develop a self-financing 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, and whether the payment will be relatively large or relatively small.
a. Aysha owns land 3 miles from the city center. She is a compensate [or, ee], and the payment will be relatively [large, small] compared to other similarly situated landowners?
b. Rick owns land 1.5 miles from the center. He is a compensate [or, ee], and the payment will be relatively [large, small] compared to other similarly situated landowners?
c. Matt owns land 3.5 miles from the city center. She is a compensate [or, ee], and the payment will be relatively [large, small] compared to other similarly situated landowners?
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