Microeconomics 6th Edition by Robert Hall, Shirley Kuiper, Marc Lieberman

Exercise 9

While crime rates fell across the country over the past few decades,they fell especially rapidly in Manhattan. At the same time,there were some neighborhoods in the New York metropolitan area in which the crime rate remained constant. Using supply-and-demand diagrams for rental housing,explain how a falling crime rate in Manhattan could make the residents in other neighborhoods worse off. (Hint: As people from around the country move to Manhattan,what happens to rents there? If people already living in Manhattan cannot afford to pay higher rent,what might they do?)