Consider a region with two cities and a total workforce 24 = A+B, where A is...

Consider a region with two cities and a total workforce 24 = A+B, where A is the workforce
in city 1 and B is the workforce in city 2. For the negatively sloped portion of the utility
curves,

u(A) = 480 / A
; u(B) = 240 / B

1. Calculate the regional equilibrium values of the population for each city and regional utility.
Recall the conditions required for regional equilibrium: equalized utility (no one has
an incentive to move) and fixed population at a regional level.
2. Now, suppose technological innovation in the first city shifts the utility curve upward,
so along the negatively sloped portion u(A) = 720/A. Calculate the new equilibrium
populations and regional utility.
3. One more worker wanders into this region and chooses City B at random. What is
the resulting difference in utility between the two cities? Describe the process of these
cities trying to find a new equilibrium (and whether they will).

Solutions

Expert Solution

*********PLEASE UPVOTE AS SMALL TOKEN OF APPRECIATION*********

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

New Cities Boom or Bust? Consider a region with a workforce of 12 million in a...

New Cities Boom or Bust? Consider a region with a workforce of 12 million in a single city. The urban utility curve reaches its maximum with 6 million workers and includes the following combinations (W = workers; U = utility in $): Suppose the government establishes a new city with 3 million workers, leaving 9 million workers in the old city. Assume that the number of cities remains at two. a) Immediately following the establishment of the new city, the...

New Cities Boom or Bust? Consider a region with a workforce of 12 million in a...

Consider a two person firm where each individual has total time = 24 hours per day...

Consider a two person firm where each individual has total time = 24 hours per day and a utility function U=5ln(x+1)+y. The team production function is such that each dollar of income generated by the firm requires two hour of effort per day as input. a) (8.5 marks) Derive the efficient level of effort for each partner, and the corresponding level of utility. b) (8.5 marks) Derive the equilibrium level of effort when each partner acts independently, taking as given...

Consider two containers A and B where A is a rigid container and B is a...

Consider two containers A and B where A is a rigid container and B is a container with a massless, frictionless piston that maintains constant pressure. NH3 (g) is injected into both containers and allowed to come to equilibrium. At equilibrium, 2 atm of Argon gas is injected into each container. Explain any changes (up, down or no change) to the equilibrium concentrations of NH3 , N2 and H2 ? a) do the partial pressures of container A change or...

Consider a network with network ID. 192.168.56.0/24: Split the network into two subnets, A and B...

Consider a network with network ID. 192.168.56.0/24: Split the network into two subnets, A and B and provide the IP range, network ID, and broadcast of each. Show your work What is TCP three-step handshake? What happens if the handshake is not successfully completed? What technological development led to the CSMA/CD protocols becoming obsolete? Give an example of a networking protocol that we have discussed in class that utilizes UDP over TCP. Provide two pros and two cons to switiching...

Consider the following information for two all-equity firms, A and B: Firm A Firm B Total...

Consider the following information for two all-equity firms, A and B: Firm A Firm B Total earnings $1,000 $400 Shares outstanding 100 80 Price per share $80 $30 Firm A is acquiring Firm B by exchanging 25 of its shares for all shares in B 16. What is the equivalent cash cost of the merger if the merged firm is worth $11,000? ____ $2,000 $2,200 $2,400 $2,800 17. What is Firm A’s new P/E ratio after merger? ____ A)...

QUESTION 24 Consider two firms, Firm A and Firm B that have identical assets that generate...

QUESTION 24 Consider two firms, Firm A and Firm B that have identical assets that generate identical cash flows. Firm A has $10 million in debt and has 3 million shares outstanding. Firm A’s stock is traded at $10 per share. Firm B is all-equity firm with 5 million shares outstanding. Under the M&M world with perfect capital markets, what would be the stock price for Firm B? A. $8 B. $6 C. $10 D. $5 QUESTION 25 Under the...

Consider the cities B,C,D,E,F,G The costs of the possible roads between cities are given below: c(B,F)...

Consider the cities B,C,D,E,F,G The costs of the possible roads between cities are given below: c(B,F) = 11 c(B,G) = 10 c(C,G) = 8 c(D,E) = 12 c(D,F) = 13 c(E,F) = 9 c(E,G ) = 7 What is the minimum cost to build a road system that connects all the cities?

There are two Cournot competitors, A & B. Each has total cost of 12x, where x...

There are two Cournot competitors, A & B. Each has total cost of 12x, where x is a firm’s output, and demand is X = 400 – P, where P is market price. What will market price be in equilibrium? (a.) $239.8 (b.) $141.3 (c.) $130 (d.) $208 Graph it with labels, thanks!

Consider a situation where the world consists of two countries, X, and Y. The total benefits...

Consider a situation where the world consists of two countries, X, and Y. The total benefits (B) and total costs (C) of greenhouse gas emissions abatement (A) for each country are given by the functions listed below. Utility is defined as the difference between the benefits and cost of greenhouse gas abatement. Notice that the benefits of greenhouse gas abatement for each country is determined by the combined total amount of greenhouse gas abatement by both countries. This is because...

Subjects