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City A has real estate costs of $100 per unit and wages of $50,000 per worker. City B has real estate costs of $100 per

  1. City A has real estate costs of $100 per unit and wages of $50,000 per worker. City B has real estate costs of $100 per unit and wages of $40,000 per worker. Which of these statements appears true based on the Roback model?
    1. City A offers both higher amenity to workers and higher productivity to firms
    2. City A offers higher productivity to firms, but City B offers higher amenity to workers
    3. City B offers higher productivity to firms, but City A offers higher amenity to workers
    4. City B offers both higher amenity to workers and higher productivity to firms

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