True or False: Location rent is directly related to unit transport cost.?

True. Distance is commonly the most basic condition affecting transport costs. The more the distance, the higher the transportation cost. The higher the transportation cost, the lower the utility, thus rent has to decline with an increase in distance from the market.

Some more info:

Early in the 19th century Johann Heinrich von Thünen developed a model of land use that showed how market processes could determine how land in different locations would be used.

In 1960 William Alonso completed his dissertation which extended the von Thünen model to urban land uses. His model gives land use, rent, intensity of land use, population and employment as a function of distance to the CBD of the city as a solution of an economic equilibrium for the market for space.

The von Thünen model required considerable modification to apply to residential, commercial and indusstrial land use. In the von thünen model the bid-rent function declined as a result of the increased transportation costs to transport the produce of one unit of land one additional unit of distance.

A preliminary rationalization of a bid-rent function for a household came out of the Chicago Transportation Study. There the results indicated that households behaved as though they had a combined rent and transportation budget such that if transportation cost were higher then the amount that they would pay for rent is lower.

I hope this helps

Assuming it is a perfectly competitive market, yes. However, locations vary and are differentiated, so no way, buddy. Transport costs have been relatively low in the past 50 years, but rising gas prices will help balance that out by forcing people to figure in transport costs more and more.

False. It can depend upon quality of neighbourhood, streetscape, visual and noise pollution (and other forms), location to vital facilities such as hospitals and schools, as well as employment. Transport is a factor but not major.