Quality of life indexes produced in popular magazines often place a heavy emphasis on the cost of housing in different cities -- with a lower housing cost entering the index as a positive feature of the city. Why might such quality of life indeces be misleading?
What will be an ideal response?
The reason that housing prices may be lower in some cities than in others is because there are amenities in the high priced cities that don't exist in the low priced cities. In fact, if that were not the case, one would expect migration pressures from high housing price cities to low housing price cities -- implying housing prices should fall in high priced cities and rise in low priced cities. If this is not happening, then something is maintaining the price differences in equilibrium -- and that something is not taken into account when we just look at housing price differences as major gauges of quality of life.
You might also like to view...
The quantity of newspapers sold will decline if: a. newsprint becomes more expensive
b. the printers' union makes wage concessions. c. newspaper prices are reduced. d. magazine prices rise.
The game theory approach to the analysis of oligopoly assumes that oligopolists
a. ignore their interdependence. b. behave with little forethought. c. do not take their businesses seriously. d. act strategically.
As the world moves toward freer trade, the composition of production shifts so that more environmentally "dirty" products are produced in ________ and more environmentally "clean" products are produced in
A. developing countries; industrialized countries. B. developing countries; neither industrialized nor developing countries. C. both industrialized and developing countries; only industrialized countries. D. industrialized countries; developing countries.
When recent college graduates begin looking for their first professional work in June, the unemployment rate
A. increases as the labor force decreases. B. increases as the labor force increases. C. decreases as the labor force decreases. D. decreases as the labor force increases.