Consider the model of household sorting into communities with different levels of public goods. Suppose community 1 (the

[answerhappygod]

Consider the model of household sorting into communities withdifferent levels of public goods. Suppose community 1 (the one witha higher level of public good provision) decided to lower taxes,decreasing gross-of-taxes housing prices.
All else equal, what happens to the income cutoff as a result ofthe lower taxes? What sort of movement do you expect as peoplestart voting with their feet? Explain in the context of themodel.
Part (a) asked you to identify the “first order effect”, holdingall else equal. But what about the long run? Do you expect thischange to be self-limiting or self-reinforcing? Explainthoroughly.