Advanced Placement (AP) Human Geography Practice Exam

In what way does the bid-rent curve illustrate economic behavior?

1. It shows how individuals with higher incomes tend to live further from the center

2. It illustrates how land prices decrease the further you move from the urban center

3. It indicates areas where businesses are likely to relocate

4. It describes population growth patterns in urban areas

The correct answer is: It illustrates how land prices decrease the further you move from the urban center

The bid-rent curve effectively illustrates economic behavior by demonstrating how land prices fluctuate based on distance from the urban center. As one moves farther away from the city center, the willingness to pay for land decreases due to factors such as increased travel costs and reduced accessibility to urban amenities and services. This is grounded in the idea that businesses and individuals are generally prepared to pay more for locations that offer proximity to the market, often resulting in higher land prices at the core of the city. In this context, as you move outward, the demand for land decreases because the benefits of being centrally located diminish. Consequently, the bid-rent curve slopes downward, showcasing that land prices are at their peak in areas closest to the center and decrease as distance increases. This reflects the economic behavior of both residential and commercial entities, emphasizing their preference for locations that maximize accessibility and minimize costs.