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Consider a country with two regions that are separated by a mountain range. Initially each region is self-sufficient in shirts and bread, and there are
Consider a country with two regions that are separated by a mountain range. Initially each region is self-sufficient in shirts and bread, and there are no cities. Suppose a tunnel is drilled through a mountain, decreasing travel costs between the two regions. The tunnel will cause the development of a trading city if three following conditions are met...
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